A Qualified Domestic Relations Order, commonly known as a QDRO, is an essential tool for completing what is often the most important transfer of assets in a divorce. Frequently, a settlement agreement will divide one or both spouses’ retirement plans as part of their marital property division. All retirement plans require a QDRO before money will be distributed to the spouse who is not the plan participant.
There are many forces at work determining which provisions should be included in a QDRO. The divorce settlement agreement, the operation of the retirement plan and that plan’s QDRO guidelines all affect how a QDRO must be drafted. Many plan’s QDRO guidelines contain assumptions that the plan administrator will make about the terms of your QDRO if your QDRO fails to provide certain things. Therefore, what is included in the QDRO is often as important as what is not included.
We have extensive experience preparing QDROs and understand both the potential complexity as well as the urgency with which clients need to have the QDRO process completed. It is important to begin the process as soon as possible because it usually takes between one and three months to receive the plan administrator’s final approval of the QDRO and complete the fund transfer. For our uncontested divorce clients, our goal is to submit any required QDROs to the court as part of the uncontested divorce filing package.
For more information on QDROs, please visit out FAQ page.