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Qualified Domestic Relations Orders: An Important Aspect of Divorce

For many married people, retirement seems years, if not decades away. Yet, before a career ends and the “golden years” begin, many couples decide to divorce. Suddenly, retirement assets that have generated interest and represent a significant amount of money becomes an asset subject to division in the marital dissolution process.

In court, a wife and husband become a participant and alternate payee.

What is a QDRO?

Qualified Domestic Relations Order (QDRO) serves as a court order separate and apart from a divorce judgment. Initially referred to as a Domestic Relations Order (DRO), it’s purpose is to divide a pension, a 401(k), or similar retirement account equitably during a divorce. It formally becomes a QDRO upon the signature of a judge.

More than 700,000 forms of private retirement plans exist in the United States. A QDRO requires specific information that includes:

  • Both the participant’s and alternate payee’s names and last known mailing address
  • The names of all retirement pension plans included in the QDRO
  • The exact dollar amount or percentage of the benefit to be paid
  • The number of payments or the amount of time that the order will apply

As with any other aspect of divorce, dividing QDROs and assets of any form can be a contentious process, particularly if it involves an uncertain financial future. Marital dissolution is an emotional process where the help of an attorney can result in sound decision-making.