It’s common knowledge that property is divided in a divorce. However, did you know your retirement accounts are also considered shared marital property? Washington law states any kind of community property can be distributed in a divorce. Retirement accounts such as 401(k), pensions, and other retirement funds are community property.
Usually, retirement accounts are one of the largest assets in a divorce. It’s important that you have a thorough understanding of your retirement accounts before the marriage dissolution proceedings. Additionally, you must be aware of the dividing process if you and your spouse choose to split your retirement funds.
Attorney for Retirement Funds in Divorce in Seattle, WA
Couples who wish to divorce must split or make an agreement regarding their retirement funds. Dividing retirement assets can be extremely confusing. If you or your spouse is seeking to divorce, it’s crucial that you contact an experienced attorney.
The attorneys at Law Offices of Shana E. Thompson has a passion for representing those struggling with divorce. We understand that just calculating your retirement plan is complicated. With our resources our attorneys won’t just calculate your plan but do whatever it takes to divide it accordingly. Don’t attempt this complicated process alone. Contact one of our attorneys today at (206) 712-2756.
Law Offices of Shana E. Thompson practices law throughout the greater King County area including Bellevue, Issaquah, Kent and Seattle.
Types of Retirement Plans in Washington
The two most common types of retirement accounts are:
- Defined Benefit Plans – A defined benefit plan is often called a pension. In a defined benefit plan you are provided a monthly benefit amount that is determined by the length of employment. Defined benefit plans are usually funded by your employer or a labor union.
- Defined Contribution Plans – Investment accounts made by both you and your employer are called defined contribution plans. Plans such as 401(k), IRAs and Thrift Saving Plans are all defined contribution plans.
Washington splits community property in a just and equitable manner during a divorce. Property you owned before the marriage is considered to be separate property and is usually, though not always, distributed to its owner. So, any retirement benefits that occurred before you were married probably won’t be distributed. However, any benefits you received during your marriage must be split.
Qualified Domestic Relations Orders in Divorce (QDRO)
Couples must divide their retirement assets with a Qualified Domestic Relations Order (QDRO). A QDRO is a court order that can assign all or a portion of your retirement benefits to your spouse. This includes any tax liabilities tied to your retirement.
QDROs are issued by the court and then reviewed by retirement plan administrators. The administrators ensure that the QDRO follows the terms of their plan and the Employee Retirement Income Security Act of 1974 (ERISA).
QDROs are also used to help spouses meet child support or alimony payments. If you or your spouse can’t pay maintenance payments on your own, a QDRO may deduct money from your retirement accounts. A QDRO will deduct payments even if the retirement pay isn’t due. This is to ensure that no one can avoid maintenance payments.
After a QDRO divides your retirement assets, you must wait for your added benefits according to the rules of the plan. For example, if your spouse must reach a certain age to collect retirement benefits you must also reach the same age to obtain your funds.
Benefits of Having an Attorney During QDRO
It’s incredibly important to have an attorney during the QDRO process. An attorney can ensure the process is properly handled and can call upon a public accountant to value retirement plans. Both your attorney and the certified public accountant can then do the following:
- Calculate both your separate and community property in your retirement plan;
- Determine the value of your retirement plan benefits; or
- Reduce any future expected benefits to present value for the divorce.
The QDRO process is complicated and can be difficult. That’s why having an experienced attorney on your side is vital. An attorney can help you uncover any hidden benefits and avoid your spouse from reaping the full value of your benefits.
How Can Property Division Affect My Retirement? – Visit the official website for the Department of Retirement Systems (DRSS) to find more information on dividing retirement assets. Learn about how to send an QDRO, how many benefits your spouse may receive and more.
Retirement Plans and ERISA FAQ – Visit the official website for the United States Department of Labor to find more information about the Employee Retirement Income Security Act of 1974 or ERISA. Learn about what ERISA addresses, the differences between retirement plans, and how your retirement plan is affected in divorce.
Washington Splitting Retirements Attorney in Seattle
Have you or your spouse filed a petition for dissolution of marriage? Are you worried about what may happen to your retirement benefits? If so, it’s imperative that you contact an experienced divorce attorney today. You may need to file for a QDRO to successfully divide your assets.
The attorneys at Law Offices of Shana E. Thompson have years of experience representing clients in Washington courts. We have a passion for helping those struggling with divorce to get back on their feet again. With our skills, resources and determination we can do whatever possible to save your assets. Call now at (206) 712-2756 to schedule your first consultation.
represents clients throughout the greater King County area and surrounding communities including Redmond, Issaquah, Seattle and Renton. We also accept clients in nearby counties including Everett in Snohomish County.