Divorcing? Don’t forget the QDRO

A typical divorce has many components to consider. Will one spouse keep the family home and buy the other out, or will it need to be listed with a realtor? How will time with the children be shared? With so much to address in the divorce petition and later in the judgment, it can be all too easy to forget that most divorcing couples will also need a qualified domestic relations order, commonly known as a “QDRO.”

If you accrued retirement benefits during the course of your marriage or were married to a spouse who did, you may need to file a QDRO with the plan administrator to later be able to access your share of your spouse’s benefits. The divorce judgment itself is insufficient for the retirement plan administrator to partition your share of the benefits and allocate those funds to you.

So, just what is a QDRO and what does it authorize? QDROs are judicial orders that authorize retirement plan administrators to transfer marital property rights, i.e., pension benefits, to a former spouse. They can also be used to pay alimony or child support to the plan participant’s spouse, dependent or former spouse. QDROs follow specific blueprints determined by the individual retirement plans. To make sure that yours has all pertinent information, your family law attorney can communicate with the administrator of the plan to get all the details. Basic information that must be listed includes:

  • Last known mailing address of the plan participant and alternate payee
  • The total dollar amount or percentage of benefits allocated to the alternate payee

Your QDRO can be appended to the final order of your divorce case, which deals with the property settlement. Alternatively, your attorney can file the QDRO separately. This option is the better choice if you prefer the plan administrator not to be privy to the details of your divorce settlement.