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3 things to know about a QDRO in divorce

On Behalf of | Dec 14, 2023 | Divorce |

One crucial aspect often overlooked when navigating through a divorce is how retirement plans are divided. This is where a qualified domestic relations order becomes a key element. 

A QDRO is a legal order used in a divorce to separate specific types of retirement plans. It requires careful attention to detail and consideration about how it affects overall property division.

The purpose and function of a QDRO

A QDRO is a legal document that allows for dividing certain types of retirement benefits in a divorce. It assigns a portion of a retirement plan participant’s benefits to an alternate payee, typically the other spouse. It typically removes penalties for early withdrawal, ensuring that both parties receive their fair share of the retirement assets accumulated during the marriage.

Specificity and compliance requirements

The QDRO needs to comply with the retirement plan’s rules and federal law. It must specify the amount or percentage of the participant’s benefits paid to the alternate payee. The order must also not require the plan to provide any type or form of benefit or option not otherwise provided under the plan.

Possibility of rejection by the plan administrator

It’s crucial to understand that the plan administrator can reject a QDRO. This often occurs if the QDRO does not meet the specific requirements of the retirement plan or if it contradicts federal regulations governing retirement plans. If a QDRO is rejected, it must be revised and resubmitted, which can lead to delays in the distribution of retirement benefits. 

Remember, the QDRO is only one aspect of property division. Looking at all martial assets and debts as a whole may be beneficial to ensure long-term effects are considered.