What Is a Qualified Domestic Relations Order?
Posted on Feb 15, 2019 4:15pm PST
A Qualified Domestic Relations Order, or QRDO, is a court order that specifies
how retirement funds are to be distributed during the divorce process.
Many people forget that retirement funds are part of their marital community
property. Once a couple comes to an agreement regarding the distribution
of their marital assets, a QDRO is issued alongside the marital settlement
agreement. This legal document can transfer retirement assets and pensions
without accruing taxes or penalties.
The QRDO:
- Serves as an instruction manual to the administrator of the retirement plan
- Determines how the retirement account should be divided
- States how and when these payments will be issued to a former spouse
- Explains how the tax consequences should be handled
A valid QDRO needs to contain specific information, including: the name
and mailing address of the participant, the name and address of the receiving
party, the Social Security numbers of both parties, the name of each retirement
plan, the amount being paid to the receiving party, and other essential
provisions.
There are many complex laws and regulations governing the division of retirement
plans. In fact, many family lawyers refer clients to forensic accounts
or attorneys who specialize in QDROs. After the representative calculates
the value of the retirement account, the lawyer can create an order for
the judge to approve. The court can also issue a QDRO even if the spouses
can’t come to an agreement on the matter.
A QDRO can divide these types of retirement plans:
- 401(k) plans
- 403(b) plans
- 457 plans
- Thrift plans
- Employee stock ownership plans
- Profit-sharing plans
- Pension plans
- Define benefit plans
- money purchase plans
- Tax-sheltered Annuities
However, not all retirement plans necessitate the creation of a QDRO:
- Individual Retirement Accounts (“IRA”)
- Government Retirement Plans
- Deferred Annuities
A spouse can choose to deposit their share into an IRA or receive the payment
in a lump sum amount.
Have Questions? Schedule a Consultation Today
Contact the
Fresno divorce lawyers at Arnold Law Group, APC if you have questions or concerns about Qualified
Domestic Relations Orders. Our attorneys can review your marital estate
and thoroughly explain your legal options. With our help, you can negotiate
a comprehensive marital settlement agreement that prepares you for the
next chapter of your life.
Call Arnold Law Group, APC
at (559) 900-1263 to schedule your free consultation.