Retirement accounts are beneficial to many Washington residents later in life. However, if they are going through divorce, they may wonder how these accounts could be affected. During the property division process, the type of retirement accounts involved -- as well applicable laws and other details -- will likely play a role in their potential for division.
Because taking money from retirement accounts early could potentially lead to taxes or fees, parties may be concerned that these could be applied during the property division process. A Qualified Domestic Relations Order allows for retirement funds to be divided between the applicable parties without being subjected to fees or taxes. This order typically applies to pensions and retirement plans sponsored by employers, whereas individual accounts require different documentation.
State law could also impact how accounts are divided. Because Washington is a community property state when it comes to property division, assets and income acquired during the marriage may be subject to an equal division. However, determining how that division is to occur is not always straightforward. If an individual is especially concerned over certain accounts, he or she may wish to negotiate with the other party in order to possibly come to agreeable terms.
Many individuals look forward to retirement, and if their accounts are substantially affected by property division, they could face understandable concerns. Therefore, Washington residents may wish to determine how their retirement accounts should be addressed during the property division process. Discussing their concerns with an experienced family law attorney could help them better understand state laws and other information relevant to their personal interests.
Source: Fox Business, "Who Gets the Retirement Accounts in a Divorce?", AJ Smith, Nov. 17, 2015