Washington is one of nine states that handles property division issues somewhat differently than the other 43 states when it comes to divorce. These nine states are governed by community property division laws, meaning all community property gained during the marriage is owned equally by both spouses, subject to equal division in divorce. For some, this creates tremendous concern regarding their retirement plans.
Unless retirement funds were accrued before marriage, they are considered marital property; thus, the court will include such funds when considering the division of community property between both spouses in divorce. Many people opt to hire a third party to value their retirement assets before heading to court. It may be possible to exchange assets of equal value, such as agreeing that one spouse will get all retirement funds while the other keeps the house (if the values are equal).
There are often tax implications in divorce as well, which may significantly impact one’s financial future. Also, if a marriage lasts 10 years, a spouse may be entitled to claim spousal benefits based on the former spouse’s employment earnings record. It’s important to be as thorough as possible when researching retirement, tax and benefits issues before heading to court.
Divorce is obviously a major life-changing decision. The longer a couple has been married, the greater financial implications the situation may bear on their future. One of the many services a Washington family law attorney can provide is to help a concerned spouse explore all property division options available and determine which one best suits his or her particular needs and financial goals.
Source: Forbes, “Does Divorce Derail Retirement?“, Christina Gann Munguia, Paola Ramos Log, July 24, 2017