What is a Qualified Domestic Relations Order?
For many couples in the Rockville area, a retirement plan is one of their largest assets besides their family home. A retirement plan, like a 401K, could hold significant assets for a couple and it can get overlooked in a divorce procedure. A Qualified Domestic Relations Order (QDRO) is a special court order that handles a retirement account.
A QDRO is an order that is prepared typically during the divorce proceedings. Because of federal law, a QDRO is the only way for a retirement plan to be divided between the couple. Unless a person has a QDRO on file, they probably will not be able to recover any portion of their spouse’s retirement plan.
An attorney who specializes in divorce has the ability to assist their client in creating a QDRO. A QDRO typically includes:
- The name and address of the plan participant and the alternative payee
- The dollar amount or percentage of the benefit to be paid to the alternative payee
- The number of payments or the time period in which the order will apply
- The name of each plan to which the QDRO applies
Once a person has a QDRO they need to submit it to the retirement account plan as soon as possible. The plan will let the person know if the QDRO is accepted or not.
Although a divorce is often an emotional matter and it can be hard for a person to think about their future needs, having an attorney who understands complicated divorce matters that can arise is important. An attorney will make sure their client is receiving advice on how the assets are distributed both now and into the future. They can also make sure their client makes a fresh start and doesn’t lose out on any of their fair share of the marital assets.