Getting divorced is never easy. Property division is one of the central areas of contention in most divorce cases, especially for couples who own complex assets, such as pension fund benefits or tax-advantaged retirement savings. You may be wondering: Are pension benefits community property in Washington? The answer is ‘yes’—at least assuming they earned during the marriage. Our Spokane property division lawyer explains how pension funds and other retirement benefits are handled in a divorce in Washington.
Know the Law: Washington is a Community Property State
Washington State is one of nine community property jurisdictions in the country. Under RCW 26.16.030, community property is property “acquired after marriage.” Community property is jointly owned by both spouses. As such, it is divided equally in a divorce.
Pension Benefits (and Other Retirement Funds) are Subject to Property Division
There is no special law or regulation that exempts a pension fund or other retirement benefits from Washington’s community property standard. In effect, this means that pension benefits and other retirement holdings are subject to property division in a divorce case. As a general rule, the marital portion of pension benefits will be divided in a divorce.
Generally speaking, any pension benefits or retirement benefits that were earned prior to the start of the marriage will remain the sole property of the individual. However, any benefits earned after the start of the marriage are community property. Those retirement benefits are subject to a 50-50 split in a divorce.
A Qualified Domestic Relations Orders (QDRO) Can Help Split Retirement Assets
Dividing retirement benefits in a divorce case can be especially complicated. It is a major mistake to just start taking money out of these accounts without a clear plan of action. In some cases, there are significant tax penalties for making an early withdrawal from a retirement account, such as a 401(k) or an IRA. In other cases, there may not even be an easy or obvious way to get at future benefits promised from a pension fund or other defined benefits plan.
The good news is that there are legal tools available that a divorcing couple can use to deal with their pension fund and other retirement holdings. A type of legal order called a qualified domestic relations order (QDRO) allows for the division of pension/retirement benefits without any penalties. A Spokane, WA divorce lawyer can help you craft a QDRO that best protects your legal rights and financial interests.
Smart, Committed Property Division Attorney in Spokane WA
At Hodgson Law Office, our Spokane divorce attorney has the professional skills and legal experience that you can rely on in a complex case. If you have any specific questions about pension/retirement benefits and divorce, we are more than ready to help you find answers. Give us a call now or connect with us online for a strictly confidential case evaluation. With a conveniently located law office in Spokane, we provide family and divorce services throughout Eastern Washington.