Washington Is a “Community Property” State. Unless otherwise designated in as separate in a prenuptial or postnuptial agreement, that pretty much covers it. Dividing Your Assets How does the court decide who gets what? by Samuel K. Darling, Divorce at Family Law Lawyer at Genesis Law Firm. Legal advice should be sought directly from a properly retained lawyer or attorney. 2. Washington law requires that the court's division of your property be "just and equitable" (RCW 26.09.080). We will get back to you shortly. Washington is not a common law marriage state. There are no comments for this post. A QDRO gives you protection and guarantees that a marital settlement agreement does not by allowing the funds in the retirement plan to be separated and withdrawn without penalty and then deposited into the non-employee spouse’s retirement account (typically an IRA) or otherwise making provisions for payout. with whom the children reside the majority of the time.”. One particular valuation issue that routinely comes up during the divorce process is how to value IRAs, 401(k)s, pensions, and other retirement assets. Don't assume your rights to retirement assets are covered just because your divorce … Learn More → Because of the unique structure of annuities, they can be a tricky asset to divide up in retirement. ... Money held in retirement accounts that was earned from employment during the marriage may be subject to division upon divorce. When preparing for the property-related component of your divorce, one of the first steps is to prepare an inventory of your community assets. You only need to reside in Washington when you file a petition with the court. Paul Battan has worked with the division of retirement assets in divorce for over 30 years. This means that all property and debt acquired during … Request Consultation: Each state publishes laws that determine how marital property should be divided during divorce. Jul 6, 2019 Family Law. For example, rather than dividing a retirement account, the spouses may agree that one spouse will keep the entire account in exchange for giving up his or her rights to other assets of equal value. Typically, the individual state laws determine how the funds in a 401(k) are divided. If there is a significant discrepancy in balance, you may opt to split them each in half. After identifying and placing an appropriate valuation on your community assets, you can then turn your attention toward formulating an equitable distribution. That includes wages and employment benefits as well as houses, stocks, and cars. The same can be done with a 401(k) plan, where the QDRO can award a spouse an interest in the retirement benefit in a divorce without incurring any penalty and without any tax as long as it is rolled over into another tax deferred vehicle (IRA). It is important for this inventory to be entirely comprehensive, as overlooking assets during the divorce process can lead to unnecessary, contentious, and potentially-costly disputes down the line. Some states follow “community property” standards. WHAT PRECAUTIONS SHOULD I TAKE. It is recommended that you work with a family law attorney who will help to prepare and inform you of your legal rights and options in this process. This means it belongs to both of you regardless of the name on the account if it was acquired during the marriage and is subject to division along just and equitable lines. The divorce cannot be granted until 90 days have elapsed after the petition for divorce is filed. With these considerations in mind, when preparing for a divorce, it is a good idea to begin thinking about prioritization. A pension earned by one spouse is usually considered a joint asset, as are other retirement accounts, such as 401(k)s, 403(b)s and IRAs, though state laws govern the latter. This is not because people are assuming their marriage will end in divorce, but because they are choosing to be prepared for all outcomes and protecting themselves and their separate property. Marriages or domestic partnerships in Washington can end through an annulment, legal separation or a divorce, also known as a dissolution of marriage. You can also protect your 401k and other assets through a prenuptial or postnuptial agreement. If so, the recipient spouse may ask for these funds if: In your final divorce order, the court must specifically state that your 401(k) a marital asset subject to division. When there is conflict and debate, stress and emotion can rise to very uncomfortable levels. If you did not, it is never too late to do a post-nuptial agreement if you both want to make sure that you and not a court will decide what happens to your accounts in the event of a divorce. Click the ‘Call Us’ button below, or complete our 'Contact' form, and put the process safely in your attorney’s hands today. Often parties will agree to each keep their own retirement benefits, and use some other asset (such as equity in a house) to balance the property division. In fact, retirement benefits are considered community property and so are subject to division in divorces in Washington State. The nature and extent of community assets; The nature and extent of each spouse’s separate assets; “The economic circumstances of each spouse . Question: Who will get the house in my divorce?Answer: Though Washington State’s laws make the outcome difficult to predict, there are guidelines judges keep in mind. Alternately, you may agree that you will keep your 401k and your spouse will receive other marital earnings comparable in value. Accessing one’s retirement account for the purposes of withdrawing money before reaching the age of 55 years old can result in specific federal income tax and penalties. What Is An Ignition Interlock Device And Will I Have To Use One? The State has its own Department Retirement Orders, that need to be signed by the court and approved by the State. Two primary types of divorce laws are in effect: community property law and equitable distribution. Divorce Issues: Division of Property and Debts. Additionally, while dividing individual assets is one option (to the extent practicable), oftentimes, divorcing spouses will agree to give up their rights in certain community assets in exchange for exclusive ownership of others. Request Your Consultation: . There are a LOT of different state retirement plans: LEOFF 1 and LEOFF II; PERS I and PERS II; etc. Although some legal problems can demand complex solutions or need to be resolved through the courts, it is always our goal to find the simplest solution to a legal dispute. While this may be a non-issue for assets that were recently acquired, particularly in the case of a long-term marriage, it is not unusual for the date of acquisition to become an issue for certain items of real and personal property. The divorce process is designed to ensure a fair outcome, and this inherently involves compromise on the part of both spouses. Usually, whatever is earned prior to the marriage remains individual property, while what is earned during the marriage is considered a joint asset. As noted above, additional complexities can arise if an account was established prior to the marriage, as this can result in separate portions of the account being deemed separate and community property. Any funds contributed to the 401(k) account during the marriage are marital property and subject to division during the divorce, unless there is a valid prenuptial agreement in place. Getting divorced in Washington means more than splitting the sheets. However, if you and your ex-spouse cannot agree, you are essentially forcing the court to decide who gets to keep what. Wills, Estate Planning, Probate and Elder Law FAQ, Real estate holdings (including, but not limited to, the family home), Artwork, jewelry, tools, and other personal property items, Digital assets (such as music libraries, photo libraries, and social media accounts). When it comes to dividing retirement accounts, you want to be informed of all possible impacts. In Washington State, divorce laws regarding property division dictate that the final settlement or ruling must be “just and equitable.” This doesn’t mean that parties split everything 50/50—instead, a judge may consider each party’s personal circumstances to determine the fairest result. Retirement assets are often the largest assets that parties own. Our attorneys in Tacoma, Washington, take a straight-forward approach to the law. But if you paid into your 401(k) before marriage, the court may decide that only a portion of your retirement account should be divided. Also, remember that if you and your spouse signed a prenuptial agreement, then the terms of your agreement may override Washington’s default community property principles. 401k’s Established and Funded Prior to the Marriage. There are any number of ways you and your spouse may decide to divide things. What Happens If I’m Under 21 & Arrested For DUI? This means your 401(k) is seen as joint property that both you and your spouse own. Which assets do you absolutely want to keep? The next step is to meet with our experienced attorneys to learn your rights and options for moving forward with your life. Washington only grants divorce on a no-fault basis. The grounds for a military divorce in Washington are the same as a civilian divorce. In order to protect your assets to the greatest extent possible, you need to know (i) which assets are subject to distribution (and which are not), (ii) the value of your assets that are subject to distribution, and (iii) what constitutes an “equitable” distribution under the circumstances of your divorce. If it is too late and your facing divorce without a prenup, be sure you are working with a knowledgeable and savvy family law attorney. Call or Text. Regardless of “ownership”, anything else you or your spouse have acquired during marriage is generally considered to be community property. Keep in mind that property may include real estate, vehicles, investments, business interests, financial holdings, pensions, and more. In most cases, divorce settlements follow an equitable distribution, meaning that 401(k) assets accumulated during the marriage are divided in half. If your 401(k) is performing well, or if you … This depends largely on laws in the state where the divorce is finalized. If you believe that your spouse has a pension, 401(k), IRA, or other retirement or disability plan, talk with a lawyer about your rights. The following is a non-exhaustive list of the factors our firm believes judges weigh most heavily: 1. These assets are supposed to appreciate over time, and the current dollar value of an account may or may not be entirely dispositive. We offer the best comprehensive and personalized divorce, family law, and criminal defense representation in the greater Seattle Area. A knowledgeable attorney will not only tell you the laws in your state but will also ensure that the proposed agreement is in your best interest now and in the future. Getting divorced in Washington means more than splitting the sheets. Thank you for contacting us. As much as a marriage is a public declaration of love and commitment, it is a financial partnership, endorsed by the government and involving certain rights and responsibilities. It is recommended that you work with a family law attorney who will help to prepare and inform you of your legal rights and options in this process. When the court is making the determination, they will consider the type and amount of each property, the length of the marriage, and each spouse's current economic circumstance. Perhaps a recipient spouse owes alimony and has achieved retirement benefits as an employee of the State of Washington or a city in this state. In such a case, the court generally splits contributions to the plan equally among both spouses. WHAT SHOULD I KNOW? Because Washington is a community property state, any asset acquired during the marriage is presumed to belong to both spouses, regardless of whose name it’s in. This means that even when spouses agree on all the terms of the divorce, they still need to wait 90 days to divorce under Washington state divorce laws. Leave the funds where they are - in your spouse's account. Your family law attorney can advise you around these complex distinctions. at the time the division of property is to become effective, including the desirability of awarding the family home or the right to live therein for reasonable periods to a spouse . Any portion of the military retirement earned during the marriage is community property. You may agree to split the 401k earnings equally or in a way that feels equitable to your unique situation. All information contained herein is provided for the purpose of providing basic information only and should not be construed as formal legal advice. If you are thinking about filing for divorce, or if think your spouse may be preparing to file for divorce, we encourage you to contact us for a confidential initial consultation. During the divorce negotiation process, spouses often make trade-offs. Protecting Retirement During A Washington State Divorce How Can I Protect My 401k or Retirement in Divorce? Even in an amicable divorce, division of assets and debt can be extremely stressful. Once you have identified the assets that are subject to division in your divorce, then you need to determine their present value. This means the 401k is fair game to become part of the divorce settlement and divided, per Washington State, along “just and equitable” lines. Be the first and Add your Comment below. Or, rather than dividing ownership of a business (which can present a variety of issues for both spouses), the spouse who runs the business might retain sole ownership while the other spouse takes another high-value asset such as the family home or vacation property. Should I Hire An Attorney If I’m Arrested For A DUI? It is easy to forget about these funds in the mix of everything else, but the funds are necessary to help you save for retirement. Unlike most other states, there are no residency requirements to initiate a divorce on Washington. For instance, lets assume parties live together like a married couple for 20 years in Montana, which is a common-law marriage state. If both spouses have 401ks, you may agree to each keep your own. To schedule an appointment at our law offices in Tacoma, WA, please call 253-272-2997 or send us a message online today. DISTRACTED DRIVING LAWS MAY TOUGHEN SIGNIFICANTLY – PUT DOWN THE PHONE! 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