A Qualified Domestic Relations Order (QDRO) is a order dividing up retirement in a divorce. Even when a divorce is finalized the process of dividing property still takes time. If the parties decided to divide any debt then they need to contact the creditor and let the creditor know how the debt was divided and complete any steps needed to remove the other parties’ name from the debt. If one party gets the home, then the parties need to complete the needed paperwork of removing the other party from the home and mortgage. In order to complete dividing up the retirement according to the terms of the divorce decree and QDRO must be completed.
Why Do I Need a QDRO?
Because the government wants you to save for retirement; they have made a statute called Employee Retirement Income Security Act of 1974 (ERISA) giving special benefits to certain retirement accounts. However, the nature of the federal law states that retirement assets are exempt from collection of a judgment and none of the money divided up can be collected by the party whose name is not on the account..
In order to split the money in a retirement account without taking the money out and paying the penalty; and to remain in compliance with the court order, congress passed the Retirement Equity Act. This law created an exception to ERISA allowing state court ordered assignments of the payment of the retirement plan. These court orders are QDROs
A QDRO must comply with both state and federal law. A properly completed QDRO will let the retirement plan know how to divide up the retirement based on your divorce decree and the correct amounts to send to each person. Because QDROs are not part of the divorce itself most attorneys will not prepare the QDRO as part of the divorce. As such, the parties themselves are often left to hire an attorney to prepare the QDRO or to prepare the documents themselves.
Our office has extensive experience and can prepare a QDRO for one flat fee. Contact our office for more information about having your QDRO done, or for any other legal issues.