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What is a QDRO and what role could one play in my divorce?

When on the precipice of divorce, you may come to learn just how complicated you and your spouse’s finances really are. And one of the most complex issues to resolve is how to divide and apportion the funds contained in a retirement account. If you are facing this daunting task, you may want to acquaint yourself with what is known as a “Qualified Domestic Relations Order.”

Essentially, a QDRO is an order you can get from the court that permits an alternate payee, such as a child, ex-spouse or spouse to receive money from a retirement account. The QDRO contains specific instructions on how money from the fund is allotted and contains the following information:

  • The name of the plan or plans covered by the order.
  • The names and last known addresses of each alternate payee and the owner of the plan, also known as the plan’s participant.
  • The duration of time or the number of payments specified by the order.
  • The percentage, amount or method for determining how much the payee is to receive.

A QDRO is required for allocating funds from retirement plans that fall under the protection of the Employee Retirement Income Security Act. One advantage of an approved QDRO is that it allows funds to be transferred from a retirement account without incurring early withdrawal penalties.

If you want to make sure that your retirement funds are properly allocated after your divorce, you may want to have an experienced high-asset divorce attorney help you fill out all of the requisite forms. The attorney can help make sure that your QDRO meets your specifications and can also work on your behalf regarding other important aspects of your property settlement.