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.
