When You Need a Qualified Domestic Relations Order
You may have heard the term QDRO without really understanding what it stands for or what it means. QDRO is an acronym for Qualified Domestic Relations Order. QDROs are a tool used in divorce cases that involve retirement and pension plan division between divorcing spouses. If you and/or your spouse have a retirement account, you’ll need a QDRO.
All Marital Assets Are Subject to Division
It is important to know that all marital assets, with certain exceptions, are subject to division at divorce. This includes pensions, IRAs, and retirement plans. Pensions and retirement plans have special rules and regulations regarding how they’re handled.
They are often handled by a Plan Administrator rather than the beneficiary of the account or plan. This separation between beneficiary and administrator is purposeful. When a pension or retirement plan is being divided between spouses in a divorce, the Plan Administrator needs instructions. QDROs provide those instructions.
Assets of the Marriage are Divided Equitably
Sometimes spouses agree to a division of marital property. Other times, a judge orders the division. Oklahoma law requires that marital assets be divided equitably. A fair division may often be a 50/50 split, but not always.
Say a spouse leaves his or her job to take care of the children. As a result, that spouse forgoes matching employer funds to their IRA or pension fund. That spouse’s retirement is then smaller than the spouse who worked outside the home and maintained a pension fund with employer-matching funds. It is only fair that the existing funds are allocated to both spouses.
Logistics of the Division: A QDRO is Needed
In a divorce, the judge issues a final divorce decree. That decree, along with the Marital Settlement Agreement, comprise the orders of the court. The decree will state which spouse gets which percentage of any available IRA, pension, and retirement funds.
The Plan Administrator is not a party to the divorce and is not bound by the decree itself. So the court issues another order, the QDRO or Qualified Domestic Relations Order. That order tells the Plan Administrator about the division and how to divide the beneficiary’s account between the two spouses.
The order is drafted then signed by the parties and the judge. The order is then given to the Plan Administrator, who checks the order to make sure it complies with Plan rules. If the QDRO complies, then the Plan Administrator qualifies the Qualified Domestic Relations Order. The Plan Administrator then signs it and sends it back to the court. The assets are then divided according to the terms of the QDRO.
Qualified Domestic Relations Orders are highly technical. If you have questions about a QDRO and whether that is applicable in your case, bring your questions and concerns to an experienced Wagoner divorce attorney. We are here to help.
Initial Strategy Session with a Wagoner Divorce Attorney
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We invite you to schedule a initial consultation to discuss what we can do for you. Contact Wirth Law Office – Wagoner at (918) 485-0335 to schedule your low-cost strategy session. You can also fill out the form at the top of the page.
