AN
ACT Relating to the transfer of a community property interest in an individual
retirement account at death; and amending RCW 6.15.020.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
6.15.020 and 1990 c 237 s 1 are each amended to read as follows:
(1)
It is the policy of the state of Washington to ensure the well-being of its
citizens by protecting retirement income to which they are or may become
entitled. For that purpose generally and pursuant to the authority granted to
the state of Washington under 11 U.S.C. Sec. 522(b)(2), the exemptions in this
section relating to retirement benefits are provided.
(2)
Unless otherwise provided by federal law, any money received by any citizen of
the state of Washington as a pension from the government of the United States,
whether the same be in the actual possession of such person or be deposited or
loaned, shall be exempt from execution, attachment, garnishment, or seizure by
or under any legal process whatever, and when a debtor dies, or absconds, and
leaves his or her family any money exempted by this subsection, the same shall
be exempt to the family as provided in this subsection. This subsection shall
not apply to child support collection actions issued under chapter 26.18,
26.23, or 74.20A RCW, if otherwise permitted by federal law.
(3)
The right of a person to a pension, annuity, or retirement allowance or
disability allowance, or death benefits, or any optional benefit, or any other
right accrued or accruing to any citizen of the state of Washington under any
employee benefit plan, and any fund created by such a plan or arrangement, shall
be exempt from execution, attachment, garnishment, or seizure by or under any
legal process whatever. This subsection shall not apply to child support
collection actions issued under chapter 26.18, 26.23, or 74.20A RCW if
otherwise permitted by federal law. This subsection shall permit benefits
under any such plan or arrangement to be payable to a spouse, former spouse,
child, or other dependent of a participant in such plan to the extent expressly
provided for in a qualified domestic relations order that meets the
requirements for such orders under the plan, or, in the case of benefits
payable under a plan described in sections 403(b) or 408 of the internal
revenue code of 1986, as amended, or section 409 of such code as in effect
before January 1, 1984, to the extent provided in any order issued by a court
of competent jurisdiction that provides for maintenance or support. This
subsection shall not prohibit actions against an employee benefit plan, or fund
for valid obligations incurred by the plan or fund for the benefit of the plan
or fund.
(4)
For the purposes of this section, the term "employee benefit plan"
means any plan or arrangement that is described in RCW 49.64.020, including any
Keogh plan, whether funded by a trust or by an annuity contract, and in
sections 401(a) or 403(a) of the internal revenue code of 1986, as amended; or
that is described in sections 403(b) or 408 of the internal revenue code of
1986, as amended, or section 409 of such code as in effect before January 1,
1984. The term "employee benefit plan" shall not include any
employee benefit plan that is established or maintained for its employees by
the government of the United States, by the state of Washington or any
political subdivision thereof, or by any agency or instrumentality of any of
the foregoing.
(5)
An employee benefit plan shall be deemed to be a spendthrift trust, regardless
of the source of funds, the relationship between the trustee or custodian of
the plan and the beneficiary, or the ability of the debtor to withdraw or
borrow or otherwise become entitled to benefits from the plan before
retirement. This subsection shall not apply to child support collection
actions issued under chapter 26.18, 26.23, or 74.20A RCW, if otherwise
permitted by federal law. This subsection shall permit benefits under any such
plan or arrangement to be payable to a spouse, former spouse, child, or other
dependent of a participant in such plan to the extent expressly provided for in
a qualified domestic relations order that meets the requirements for such
orders under the plan, or, in the case of benefits payable under a plan
described in sections 403(b) or 408 of the internal revenue code of 1986, as
amended, or section 409 of such code as in effect before January 1, 1984, to the
extent provided in any order issued by a court of competent jurisdiction that
provides for maintenance or support.
(6)
Unless contrary to applicable federal law, nothing contained in subsection (3),
(4), or (5) of this section shall be construed as a termination or limitation
of a spouse's community property interest in an individual retirement account
held in the name of or on account of the other spouse, the account holder
spouse. At the death of the nonaccount holder spouse, the nonaccount holder spouse
may transfer or distribute the community property interest of the nonaccount
holder spouse in the account holder spouse's individual retirement account to
the nonaccount holder spouse's estate, testamentary trust, inter vivos trust,
or other successor or successors pursuant to the last will of the nonaccount
holder spouse or the law of intestate succession, and that distributee may, but
shall not be required to, obtain an order of a court of competent jurisdiction,
including any order entered under chapter 11.96 RCW, to confirm the
distribution. For purposes of subsection (3) of this section, the distributee
of the nonaccount holder spouse's community property interest in an individual
retirement account shall be considered a person entitled to the full protection
of subsection (3) of this section. The nonaccount holder spouse's consent to a
beneficiary designation by the account holder spouse with respect to an
individual retirement account shall not, absent clear and convincing evidence
to the contrary, be deemed a release, gift, relinquishment, termination,
limitation, or transfer of the nonaccount holder spouse's community property
interest in an individual retirement account. For purposes of this subsection,
the term "nonaccount holder spouse" means the spouse of the person in
whose name the individual retirement account is maintained. The term
"individual retirement account" includes an individual retirement
account and an individual retirement annuity both as described in section 408 of
the internal revenue code of 1986, as amended, and an individual retirement
bond as described in section 409 of the internal revenue code as in effect
before January 1, 1984. As used in this subsection, an order of a court of
competent jurisdiction includes an agreement, as that term is used under RCW
11.96.170.
