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“Til death do us part” is included in most wedding vows, and few people enter a marriage intending to get divorced. Spouses often spend years planning a long-term future together, including their retirement. When circumstances change, and a divorce occurs, the couple must determine how to split the assets they planned to use in their golden years. Since spouses generally divide expenses and plan for retirement together, Washington state considers most retirement accounts joint assets — even when only one spouse financially contributed to the plan. The complexity of splitting the funds will depend on several factors, including the account’s value and when it was opened. Smaller retirement account balances are typically split in a relatively straightforward manner. Often, couples use the process of “equalization,” where they trade the retirement account for an asset of similar worth. For example, one spouse may keep the $10,000 in their retirement account while another retains ownership of a similarly valued family vehicle. But 401(k), IRA, and other retirement savings can sometimes be the most valuable asset a couple owns. Most of these cases are resolved in Washington using a Qualified Domestic Relations Order (QDRO). A QDRO establishes a retirement account division between spouses and designates an additional payee. Once a QDRO is established, the spouse whose name is not on the account will receive a division of the funds. The recipient spouse can choose to keep the funds in the original account, roll over the funds into an IRA account, or withdraw all or a portion of the value in cash. However, anyone under 59 1/2 will face significant tax penalties on a cash withdrawal and should understand the full financial consequences. Dividing retirement assets during a divorce is often one of the most complex portions of the process. A QDRO drafted without adequate care can produce devastating financial consequences, profoundly affecting one’s future quality of life. Couples should never attempt to split these assets without an attorney’s assistance, nor should they try to “hide” or “claim” the assets by withdrawing from the accounts. Contact our office with any questions about retirement assets during a divorce, and we can help you develop a fair, legally sound plan. THE BEST LAID PLANS How to Legally Divide Retirement Assets
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like extreme bullying, can also be a factor. Ultimately, the court will base its decision on the child’s best interests.
Crucially, conflicts over educational costs don’t necessarily end after a child’s high school graduation. Disputes also erupt over post-secondary expenses for children attending college. As we shared in a previous newsletter, you must meet specific deadlines to receive post-secondary support from your child’s other parent — and the clock is quickly running out. If you have questions about securing post-secondary support, please call our office at (564) 212-2733 before it’s too late.
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