Do you need a qualified order to split benefits in your divorce?

Some divorces are simpler than others. For instance, couples who have only been married for a short time and who have few assets and resources may not even need to hire attorneys if both agree to divorce amicably.

But those couples who have a long history together and share valuable assets like interests in pensions or retirement funds discover that ending their marriages is a bit more complicated. In these type of cases, it is quite helpful when both parties retain knowledgeable counsel to represent their best interests.

Will you need a QDRO?

If you have never been divorced, chances are good that you have never heard of a Qualified Domestic Relations Order (QDRO). These orders must meet the court's approval in order to disperse all or a portion of a retirement plan participant's benefits to a former spouse or other approved alternate payee.

QDROs are needed when dividing pension benefits during divorce, or as child or spousal support.

Is this a separate order?

It can be, but this is not necessary. Often with divorce, there will be interim orders issued by the court. A QDRO is usually issued either as part of the final divorce decree or as a separate document that's filed simultaneously with the final judgment.

What information do QDROs contain?

In order to be considered qualified by the court, QDROs must contain very specific language and information that complies with the federal amended Internal Revenue Code of 1986 as well as the Employee Retirement Income Security Act of 1974. As such, your family law attorney will be sure to include the following:

  • Pension or retirement plan's name;
  • Participant's name and last available mailing address;
  • Alternate payee's name and last available mailing address;
  • Amount of benefits that are paid out and how this is calculated;
  • Total number of disbursements, or the length of time the QDRO is applicable.

Of course, each pension plan may have additional information that must be included in order for any benefits to be reassigned to an alternate payee. Your attorney can review the individual specifications in the rules and procedures section of the plan's QDRO information manual or speak directly with the Administrator of the plan.

Don't leave valuable assets on the table

Pension and retirement funds are only part of the assets that must be divided in a complex divorce. Expensive antiques, wine and other high-value collections, vintage cars and expensive jewelry all need to be carefully valuated in order to reach a settlement that is equitable.

Make sure that your family law attorney includes all resources and assets when dividing the marital property during your divorce.

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