How Are Retirement Benefits Divided in Divorce?

Retirement benefits and divorce - Seattle Divorce Services

This might also be titled “What is a QDRO?”, but the answer is really bigger than that. Some people assume that because retirement benefits were earned by the one party and is in her or his name, it is not subject to division.

In fact, retirement benefits are considered community property and so are subject to division in divorces in Washington State.

Often parties will agree to each keep their own retirement benefits, and use some other asset (such as equity in a house) to balance the property division. Typically in divorce, we do not split each asset; but rather we make piles and try to make the piles come out reasonably even.

In other words, we might give assets A and B to one spouse, C and D to the other spouse, and then divide E to even things up.

In other cases, particularly where only one party has a significant retirement plan, we might go ahead and divide the plan so that both parties have some income coming in after retirement age. In that case, we typically use what is called a QDRO (Qualified Domestic Relations Order).

Generally the QDRO actually splits the retirement plan into two parts, one part to each spouse in their own name. Therefore, a spouse can end up having a retirement plan with a company they never even worked for!

Social Security is treated differently, however. Under Federal law, a Social Security benefit cannot be split. However, a spouse may have their own Social Security entitlement based on the other spouse’s work history, if that benefit would be greater than they would receive based on his or her own work history.

In some cases, spousal support might be ordered to be paid from one spouse to the other from their Social Security income.