Dividing property during divorce is tedious and stressful. While some couples do maintain an amicable relationship throughout the process, oftentimes animosity, hurt, and disappointment muddy the waters. However, despite heavy emotions, couples must approach property division educated about property classifications and potential legal issues. For example, many couples often overlook the proceeds of retirement plans when initially considering their property. Therefore, divorcing couples must educate themselves about qualified domestic relations orders (QDRO) to ensure they are appropriately dividing their retirement savings.
What is a Qualified Domestic Relations Order (QDRO)?
Retirement benefits can hold a significant amount of value, so it’s important to divide them accurately. By filing a qualified domestic relations order (QDRO), a spouse seeks to secure a portion of the proceeds of a non-government based retirement benefit plan held by the other spouse. In other words, a QDRO allows a spouse (alternate payee) to receive income from any retirement benefits accrued (the plan) by their spouse (the participant) during the course of their marriage. More specifically, filing a QDRO orders the party that administers the payments from the plan, typically the employer, to allocate a portion to the alternate payee.
Legal Guidelines & Restrictions
The Employee Retirement Income Security Act (ERISA) governs QDROs by protecting employee retirement benefits. Under ERISA, barring certain exceptions, retirement benefits are inalienable. In other words, ERISA ensures outside parties cannot forcibly transfer retirement benefits away from the participant. However, ERISA makes an exception for QDROs. Thus, an appropriately filed and approved QDRO reduces ERISA protections. Now, the alternate payee spouse can seek payments from the retirement benefit.
Note that an alternate payee must file a QDRO with a qualifying government agency – typically the state court. QDROs that are not approved by the appropriate agency are not enforceable under the provisions of ERISA. As a result, any spousal agreement to split or divide retirement plans that has not been approved by the appropriate government agency will not be enforceable.
Finally, remember that only private companies’ benefits are eligible for transfer with QDROs. On the other hand, similar but separate orders called domestic relations orders control government-based retirement benefits. Therefore, if the government employs the participant, the alternate payee must file a domestic relations order in place of QDRO.
How Do I File a QDRO?
The process of filing a QDRO is complex. While the paperwork may seem straightforward upon first glance, the laws concerning QDROs are intricate. Plus, regulations can shift depending on the type of retirement benefit you are dealing with. Furthermore, failure to enter information correctly may result in an unenforceable agreement. Therefore, it is important to identify each spouse’s type of retirement plan and the accompanying paperwork.
If you need help preparing the necessary forms for a qualified domestic relations order or any other legal action, consider hiring A People’s Choice. We have decades of experience helping our clients prepare required legal forms. Plus, we assist them throughout the entire legal process without the extra stress or expense of an attorney. Reach out to our offices today and let the team at A People’s Choice do the heavy lifting for you.
I really appreciate , you responding on my questions. Wow , I have paid the money for the QDRO , referred by this lawyer. How can she let me do that when I don’t have a judgment yet? Money is so tight for me since, my soon to be ex doesn’t at all share mortgage payment and I might loose my house. I can’t touch my 401 or my pension plan coz its frozen due to the QDRO . I’m so lost right now and stressing me.
Cora – perhaps she had you pay for the QDRO knowing you were going to need to do it. I cannot surmise the intent of the attorney. However, we are here to help you if you decide to represent yourself in your divorce case. Good luck!
Do we need to settle QDRO and the house before you get a Final Decree or Divorce Final Judgement? My Divorce lawyer doesn’t communicate at all and its frustrating. Can I file a complaint to the Board?
I applied Dec. 2013 and currently just in the Status stage and the QDRO still in process. No decree yet
Please Help and I need your guidance. I’m looking for a good lawyer who will take care of my case and I have to google things .
Cora – if your lawyer is not communicating with you it may be time to get rid of him or her. That is completely unacceptable. Typically the QDRO is done after you get a judgment. You need to know what the division of the retirement benefit is before you can do the QDRO. Depending upon where you are in the case, you may be able to finish the case on your own, particularly if you feel your attorney is not doing their job. Give us a call at 800-747-2780 if you want to discuss how we may be able to help you.
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