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What is A QDRO And When Do I Need One?

Dividing marital property is one of the most important functions of the divorce final judgment. Most marital assets are legally divided in the manner set forth in the divorce final judgment without further confusion or concern. The exception is the division of retirement assets/benefits accumulated during the marriage by you, your spouse, or both of you. If either of you have an employer based retirement plan, you will need a QDRO, a Qualified Domestic Relations Order, to legally divide the retirement assets and to avoid inadvertently triggering income tax penalties in the process.

This is because employer retirement plans are governed under federal law. This federal law allows retirement plan administrators to recognize a court-ordered assignment of a portion of one spouse’s retirement benefits to the other spouse, only if the order is a QDRO. QDRO’s must satisfy several technical requirements under federal law in order to effectively transfer retirement benefits from one spouse to the other in a divorce. A QDRO can also be used to seek payment for support arrearages from the retirement benefits of the deadbeat parent, even if the parent is not yet retired or no longer working for the same employer.

The QDRO does not have to be entered at the time of the divorce, but it should be entered soon after to protect the recipient’s property rights. There is no legal deadline, however. One QDRO can cover several different employer plans or different plans from the same employer, as long as the QDRO specifically describes each plan and the benefit rights under each plan.

The preparation of a QDRO often calls for special expertise.  Your experienced family law attorney can advise you whether a QDRO is necessary in your case and, if needed, recommend an appropriate professional to prepare the QDRO.