When a married couple dissolves their marriage, the final divorce decree might not be the only court order that impacts both spouses’ lives in the future. In some cases, a qualified domestic relations order—or QDRO—might also be necessary.
What is a QDRO?
When you and your spouse decide to divorce, assets like retirement accounts acquired during the marriage need to be distributed. A QDRO enables this division while adhering to the legal requirements set by the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code.
A QDRO is a formal court order that is issued after the divorce is finalized and which divides retirement plans so that you both share in the benefits that were acquired during the marriage following your final Judgment.
Once the proposed QDRO has been drafted, it is up to both the court and the plan administrator to approve the order. Approval is never guaranteed, as there are strict technical requirements for these orders.
Technical Requirements for a QDRO:
There are both state and federal requirements that every QDRO must meet in order for the agreement to be valid.
Creating a QDRO involves several technical requirements to ensure that the document is legally valid and enforceable. Here are some key elements that a QDRO must include:
- Plan Administrator: The QDRO should identify the plan administrator.
- Participant and Alternate Payee Information: Clearly identify the participant (the retirement plan holder) and the alternate payee (usually the former spouse) in the QDRO.
- Plan Information: Specify the type of retirement plan or plans covered by the QDRO, including the plan name, address, and any relevant account numbers.
- Payment Terms: Outline how the benefits will be divided, whether as a lump sum or periodic payments, and specify the percentage or dollar amount assigned to the alternate payee.
- Distribution Conditions: Detail the circumstances under which distributions will be made to the alternate payee, such as the participant’s retirement, disability, or death.
- Death of Either Party: Determine what occurs if one former spouse is deceased prior to either spouse collecting their respective benefits. In some cases, the benefits could go to their heirs: in others, they could remain with the former spouse.
- Valuation Date: Determine the valuation date used to calculate the value of the retirement account for distribution purposes.
Who Can Draft a QDRO?
Drafting a QDRO is a complex process that requires legal expertise in both family law and retirement plans. Attorneys with experience in divorce and retirement asset division are best suited to draft QDROs. These professionals understand the intricacies of state laws, federal regulations, and the specific requirements of different retirement plans.
Contact Family Ally for an Experienced St. Louis QDRO Attorney
If you are going through a divorce and need assistance drafting a QDRO, the experienced team at Family Ally can guide you through the process, ensure that your interests are protected, and help you navigate the complexities of QDRO requirements.