What is Required for a Qualified Domestic Relations Order (QDRO)?

What is a Qualified Domestic Relation Order?

A qualified domestic relation order (QDRO) is a legal document that recognizes an “alternate payee’s” right to receive all or a portion of a party’s retirement benefits. The document may also assign this right to an alternative payee.

South Jordan family law attorneys say that a QDRO typically exists in divorce agreements, recognizing that an ex-spouse, child, or another dependent must receive a predefined portion of the account owner’s retirement plan assets. However, to fulfill this obligation, the QDRO must include specific information and meet certain requirements.

How Does a QDRO Work?

A QDRO divides a retirement or pension plan in divorce by acknowledging joint ownership. It makes provisions that more than one person will receive retirement benefits by allowing the alternate payee to receive part or all of the assets. A QDRO is not a cash payout by itself but a formal way of dividing a retirement account.

QDRO lawyers in South Jordan advise that there is a notable distinction between a domestic relations order and a qualified domestic relations order. While any court can issue a domestic relations order, it only becomes “qualified” once the plan accepts it.

Once a plan’s administrator receives a domestic relations order, they will decide whether it is qualified and establish a separate account for the beneficiary. Specific procedures exist for each plan to determine whether a domestic relations order qualifies for its intended purpose.

What Does a Qualified Domestic Order Include?

QDROs are only valid for retirement plans under the Employee Retirement Income Security Act (ERISA), such as 401(k)s. They must comply with ERISA standards. Before a judge can sign a QDRO, the entire retirement plan’s administrators should review it to check that it meets the requirements and complies with the terms of the specific plan and the IRS code.

It also must adhere to the company’s requirements and all applicable laws and regulations. QDRO laws are highly complex, and each plan has unique rules for drafting the document.

Having a QDRO reviewed by a plan administrator can attract an additional cost, so plans have templates for QDROs or information sheets that participants can use when drafting the order. South Jordan QDRO attorneys say that the minimum essential information that must be captured on the document includes the following:

• The name and last mailing address of the plan owner and each alternate payee
• The name of each plan covered by the QDRO
• The percentage or dollar amount to be paid to the alternate payee
• The number of payments or length of the period covered by the order

Any additional content of the QDRO depends on the type of retirement plan, retirement benefits, the intent of the parties, and the purpose of issuing the QDRO. South Jordan QDRO attorneys experienced in various kinds of QDROs can guide you within a legal framework to ensure you create a valid order.

Provisions That Can’t Be Included in a QDRO

Regardless of the type of retirement plan to which a QDRO is directed, the order can’t require a retirement plan:

• To provide the alternate payee or participant any benefit or option the plan usually doesn’t provide
• Provide increased benefits
• Pay benefits to an alternate payee due to another alternate payee under the QDRO
• Submit proceeds to a beneficiary in the form of a qualified joint and survivor annuity for the lives of the payee of their spouse

Do I Need a QDRO?

Multiple benefits may be considered marital property, such as Individual Retirement Accounts (IRAs), pensions, retirement plans, and other retirement assets. In most families, a retirement plan is one of the most significant assets after the marital home. Retirement assets, apart from IRAs, can be transferred from one spouse to another through a QDRO.

You need a QDRO to become legally entitled to receive a share of the money in your ex-spouse’s retirement plans. The court’s timing of the preparation and entry of the QDRO when granting divorce depends on the specific retirement or pension plan.

Consult experienced QDRO lawyers in South Jordan to evaluate whether the timing could affect your rights to a retirement plan. Some potential consequences of waiting too long before seeking a QDRO include the following:

• Once your ex-spouse starts receiving benefits from the retirement fund, it can be difficult to retroactively claim the benefits you would have been entitled to receive
•  If the plan has any pre-retirement death benefits, you won’t be able to receive the benefits
• Without a QDRO, your ex-spouse has complete control of the retirement account, meaning they could reduce the fund’s value by withdrawing contributions or obtaining a loan against the account.
• The longer you take to seek a QDRO, the higher the likelihood that the relevant evidence will become more challenging to locate, as financial institutions only keep records for a limited period. Loss of evidence could minimize your ability to seek maximum contribution from the retirement or pension plan.

Navigating Qualified Domestic Relations Orders with the Help of Skilled Family Law Attorneys

Qualified Domestic Relations Orders are legal documents used during a divorce to help individuals access all or a part of their ex-spouses’ retirement benefits. For the documents to be valid, they must meet the minimum requirements and include crucial details such as the participants’ and payees’ names and addresses. The orders must also comply with various laws.

Drafting a QDRO can be complex and time-consuming. However, working with experienced family law attorneys in South Jordan can make it easier to navigate the process. They can oversee the drafting of the document and review it for mistakes to ensure it’s enforceable.

The QDRO lawyers at RCG Law Group can evaluate your case and help you obtain a QDRO to fight for what you deserve. Call us at 385-503-3663 to schedule a case assessment.