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Millions of workers in Washington have employer-sponsored retirement plans, including 401ks and 403(b)s. After working for decades, many men and women have considerable sums in their account. If you are divorcing in Washington, then your retirement account is probably community property, which means it could be divided along with other assets obtained while married. A Qualified Domestic Relations Order (QDRO) is necessary to divide the account without incurring penalties. Contact Amanda J. Cook today for assistance with your divorce.

Why Do You Need a QDRO?

Employer-sponsored retirement plans have many rules and limitations. One general limitation is that you cannot take a withdrawal until you reach age 59.5. Any standard withdrawal before that age is usually subject to a 10% early withdrawal penalty.

This penalty can come into play with a divorce. Suppose a judge awards your ex half of your 401k. Although you could log into your account and withdraw the money, you will have to pay 10% as a penalty. Consequently, your ex would end up receiving less because of the 10% early withdrawal bite.

A QDRO is a judicial order which helps avoid penalties. Your divorce lawyer should be familiar with this type of document and file it with the court.

You will not need a QDRO if you are dividing a plan which is not covered by ERISA, such as a state-sponsored plan. However, you will probably need a different type of judicial order. Discuss what kind of retirement plans you have during your initial consultation with a divorce lawyer.

Obtaining a QDRO

You will first need a domestic relations order from a Washington court. Typically, the domestic relations order applies to the division of property in a divorce. The order must meet both federal and state rules. Ideally, you should submit the QDRO at the same time as your divorce decree.

Necessary Components of a QDRO

A QDRO should include:

• Personal information of both the plan participant (the worker) and the alternate payee (who is receiving part of the retirement account in divorce).
• Information about the specific plan involved.
• How much is to be paid to the alternate payee.

A QDRO also cannot contain certain information, such as requiring benefits not offered by the plan. The plan administrator would reject the QDRO in that situation.

The Plan Administrator’s Role

The administrator is responsible for reviewing the QDRO and accepting or rejecting it. Often, your lawyer should work with the administrator when drafting the QDRO so it is done properly.

The administrator then divides the account according to the QDRO. For example, the administrator might set up a separate account for the alternate payee (the spouse).

If you are receiving money from your ex’s 401k, talk with an attorney. You might be able to take a one-time withdrawal without any penalty, even if you have not yet reached retirement age.

Contact The Law Office of Amanda J. Cook

Dividing community property does not receive as much attention as setting child custody, but there are many pitfalls involved with handling retirement accounts. Contact our office today to discuss this or any other issue.

Washington allows people to legally change their name and has established a process to follow. Many people legally change after marriage or divorce or as part of a gender transition. Others simply want a new name because they dislike their old one. Call The Law Office of Amanda J. Cook if you need assistance with any of the steps below or if you have a family law question.

Fill Out a Petition for Name Change

You need court permission to change your name, so go to the district court for the county where you live. The court might have a name change form you can fill out. The form will request that you provide:

• Your proposed new name.
• The reason for changing your name.
• A declaration you are not changing your name for a fraudulent reason.

If a minor wants to change their name, then you file the petition with the Superior Court. Minors typically need consent from both parents, otherwise the court will hold a hearing.

Note: If you are changing your name as part of a divorce, you can make that request in your divorce papers. The judge will approve the name change when you receive your divorce decree.

File Your Petition with the Court Clerk

You will need to pay a filing fee. Call ahead to ask how much and acceptable methods of payment. Typically, the fee should not be much more than $100. If you cannot afford the fee, then ask about a fee waiver.

Attend Your Court Hearing

You typically need to attend a hearing before a judge. The judge will likely want to confirm you are not changing your name to avoid the police or perpetrate a fraud. For example, you can’t change your name to pretend to be a celebrity.

If the judge agrees to your proposed change, they will sign an Order for Name Change.

Get Certified Copies of the Order

Once the judge signs off on the change, Congratulations! Now you need to update important governmental records, and you’ll need certified copies of the judicial order. You can get them from the clerk of court.

Update Your Records

This is a critical step. You’ll want updated records to reflect your new name. Most people will use certified copies to update:

• Driver’s license
• Social Security card
• Passport
• Bank accounts
• Insurance policies
• Gym membership
• Professional licenses

Remember to notify your children’s school of your name change, too. They sometimes want to see ID when you pick up a child or volunteer to act as a chaperone on field trips, and you don’t want any confusion.

Call The Law Office of Amanda J. Cook  to Discuss Name Changes

The steps listed above probably do not appear too confusing, but many people still have questions. Reach out to the Law Office of Amanda J. Cook to discuss a name change or a family law issue, such as divorce. We can help if another parent objects to a name change or there are questions about why you wish to change your name.

The average American household has approximately $87,000 saved for retirement across various accounts, and these accounts are often involved in family law disputes. However, early withdrawal from these retirement plans can result in significant taxes and penalties.

In certain family law matters, particularly divorce, a Qualified Domestic Relations Order (QDRO) is essential. A QDRO is a legal order that recognizes an alternate payee’s right to receive a portion of the retirement benefits from a plan participant. Without this order, transferring or withdrawing funds from the account could be costly and legally problematic.

When Do You Need a QDRO?

One of the most common scenarios requiring a QDRO is divorce. In Washington State, assets acquired during a marriage are typically considered community property and must be divided equitably between the spouses. The court generally totals the value of all community property and divides it equally.

Often, a retirement account, such as a 401(k), is among the largest marital assets and needs to be divided. Each spouse will leave the marriage with a designated portion of the account.

For example, consider John and Sarah, who were married for 15 years. During this time, John’s 401(k) grew to $200,000. The couple has additional savings but no real estate assets. During the division of community property, the court awards Sarah $40,000 from John’s 401(k), leaving John with the remaining $160,000.

A QDRO is necessary to establish Sarah’s legal right to $40,000 from the account. Since she is neither a plan participant nor a designated beneficiary, the retirement plan administrator will not transfer any portion of John’s 401(k) to her without a valid QDRO.

While dividing community property is the most common reason for a QDRO, it may also be required in other family law matters, such as to fulfill child support obligations.

Where Do You Get a QDRO?

A QDRO is obtained through the court handling your divorce. The court can issue the order directly or formally approve a proposed property settlement agreement that includes the QDRO.

A QDRO must contain specific information, including:

• The names and mailing addresses of both the plan participant and the alternate payee.
• The name of each retirement plan the QDRO covers.
• The percentage or dollar amount to be paid to the alternate payee.
• The number of payments or the time period the order applies to.

It is equally important to avoid including prohibited provisions, such as requiring the retirement plan to provide benefits or options not originally available under the plan. For this reason, working with an experienced family law attorney is essential to ensure the QDRO is correctly drafted.

After submission, the retirement plan administrator will review the order to confirm it qualifies as a QDRO. If the administrator rejects the order, affected parties have the option to challenge the decision in court.

Do You Always Need a QDRO?

Not necessarily. If your divorce does not involve the division of retirement accounts, you may not need a QDRO. For instance, if John and Sarah both had their own retirement accounts and other assets, the court could divide those assets equally without requiring Sarah to receive any portion of John’s 401(k). In such cases, a QDRO would not be necessary.

Call to Speak with an Experienced Family Law Attorney

Dividing community assets, particularly retirement accounts, can be complex and filled with hidden challenges. Amanda J. Cook has extensive experience helping men and women navigate divorce and QDRO-related issues. Contact our office today to schedule a consultation and ensure your rights are protected during this critical process.

Anyone planning for a divorce in Washington State who has retirement assets likely to be classified as community property must understand qualified domestic relations orders (QDROs). In a Washington State divorce, property classified as community property—unlike separate property—must be divided between the spouses in a manner that is “just and equitable” under state law. For many couples, community property includes retirement accounts and benefits, such as 401(k) accounts, 403(b) accounts, individual retirement accounts (IRAs), and pensions. To divide these accounts or benefits, a judge must issue an order known as a QDRO.

What is a QDRO in Washington State?

A QDRO, as defined by the U.S. Department of Labor, is a domestic relations order issued by a court that “creates or recognizes the existence of an ‘alternate payee’s’ right to receive, or assigns to an alternate payee the right to receive, all or a portion of the benefits payable with respect to a participant under a retirement plan.”

What does that mean in practical terms? In short, a QDRO is a court order that allows a judge to allocate a portion of one spouse’s retirement account or benefits to the other spouse without incurring penalties or taxes associated with an early withdrawal.

Understanding the Need for QDROs in Washington State

Why are QDROs required in Washington State divorces? In other words, why can’t retirement benefits be divided like other marital assets?

Retirement accounts and pensions are governed by specific rules concerning withdrawals and distributions. When a retirement plan distribution is made before the participant reaches retirement age, the Internal Revenue Service (IRS) assesses income taxes and an additional 10% penalty tax for early withdrawal. While certain exceptions may allow a participant to avoid the early withdrawal penalty, these exceptions rarely apply in divorce cases. In addition to the penalty, any distributions are added to gross income and taxed accordingly.

A QDRO allows retirement benefits to be divided without triggering income taxes at the time of the division and avoids the 10% early withdrawal penalty.

Ways of Dividing Retirement Benefits Through a QDRO

Through a QDRO, retirement benefits can be divided in several ways, such as:

• Designating a percentage of one spouse’s retirement account to the other spouse, with the distribution occurring when the other spouse reaches retirement age.
• Designating a specific dollar amount of one spouse’s retirement account to the other spouse, with the distribution occurring when the other spouse reaches retirement age.
• Transferring a percentage or specific dollar amount from one spouse’s retirement account into a newly created retirement account in the other spouse’s name.

When multiple retirement accounts are classified as community property, a QDRO can address each account and specify how it will be divided.

Contact a Washington State QDRO Lawyer

If you are considering divorce or have questions about QDROs and the division of retirement assets, an experienced Washington State divorce attorney at the Law Office of Amanda J. Cook can provide guidance. Contact us today to discuss your case.