The Basics of QDROs

A Qualified Domestic Relations Order, or a QDRO, is a special court order that allocates the retirement benefits that a former spouse has earned through participation in a retirement plan. The amount allocated to an individual will vary case by case and will depend on the length of the marriage and the amount contributed to the retirement plan during that marriage. This amount is typically guided by the Marriage Settlement Agreement of the Judgment for Dissolution of Marriage that is entered by the Court.

Usually just having a final divorce agreement that states the retirement account is to be divided will not be enough. Federal Law also requires that a QDRO be entered into in addition to the final divorce decree. To enter a QDRO, you (or likely your attorney) must contact the retirement plan directly in order to inquire about any specific requirements that plan requires to be included in the QDRO. All QDRO’s must include some basic information such as the name and mailing address of both individuals, the name of the plan to which the QDRO applies, the amount or percentage that needs to be paid to the alternate payee. It is best practice to have the plan approve the plan, before submitting it to the Court for entry.  Once entered, the plan will process the QDRO, and there are options then - First, you are able to roll into an IRA tax and penalty free and contribute the money to your own continued retirement account. Additionally, you are able to withdraw that money without a penalty, however, it will be taxed.

The Law Office of Erin M. Wilson LLC can advise clients on this process and refer you to specialists to prepare the QDRO. Please contact The Law Office of Erin M. Wilson LLC for a consultation regarding your divorce and the division of marital assets at 312-767-4220.

NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post.