There are a wide variety of retirement plans, from pensions to 401(k) plans, but all of them are potentially subject to division as community property in a Washington divorce. Even if one spouse contributed to or accrued a portion of the plan’s value prior to the marriage it may be part of the overall division of assets and debts as part of the divorce.
Determining the value of a retirement plan is not always straightforward, and depends in large part on the type of retirement plan involved. While some retirement plans that are wholly community property, such as an IRA that one spouse started and contributed to during the marriage, can simply be split down the middle between the parties, most retirement plans are not so easily divided.
A Qualified Domestic Relations Order (QDRO, pronounced “quad row”) is the most common means of dividing a retirement plan. A QDRO is a court order that directs the administrator of the retirement plan to separate some portion of the account’s value for the benefit of the other spouse. The spouse then can leave his or her portion invested in the same account, roll over the funds into an IRA account, take a portion of the account in cash and roll over the remainder of the funds into an IRA, or simply cash out the entire amount of the account. If you are under age 59 ½, however, any money that you withdraw from the account will be heavily taxed, whereas any money that you roll over into an IRA will remain free from taxes.
Dividing retirement accounts is a complex process that may differ according to the value and nature of each account. The attorneys at Pacific Northwest Family Law know how to handle all aspects of Washington divorce and family law cases. Whether we able to resolve your case through alternative dispute resolution or must proceed to trial, we are here to help and give you the advice that you need. Contact our office by e-mailing us at [email protected] or call us at 1-509-792-3044 to schedule an appointment with one of our experienced divorce lawyers today.