What is a QDRO (Qualified Domestic Relations Order?)

Posted by Thomas MallonJan 04, 20160 Comments

QDRO (Qualified Domestic Relations Order) has really been misunderstood by a lot of people. In fact, numerous people also have never heard of such term.  Well, a QDRO is an authorized document that is usually filled out by a legal representative on account of a couple that is getting separated (divorced). This document is formally requested to divide retirement funds between both parties.

It is a decree, judgment or order that is made to the state domestic relations law and that relates to the provision of alimony expenses, child support, or matrimonial assets rights for the profit of a spouse, former spouse, child, or other reliant of a participant.

For a lot of families, a retirement plan is their top priority asset.  A large variety of benefits might be considered as matrimonial assets, including pensions, retirement plans, personal retirement account (IRAs), and other retirement assets. Pension and retirement assets might be offered through an employer even If a public or private or public company, the military, and contributions a spouse makes to individual accounts.  Retirement assets include accounts like thrift savings plan, 401(k)'s, 403(b)'s, 457 plans, and many more.

In Maryland divorces, retirement assets can be moved from one spouse to another. For this to be done, you should in almost all circumstances have a court order.  The accurate name of the order will differ based on the kind of plan.  The general order for a pension that is private is called a Qualified Domestic Relations Order (QDRO), but might also be called Court Orders Acceptable for Processing or Qualifying Retirement Benefits Court Orders.

A QDRO is typically used to: 

  • Provide support expenses (permanent or temporary) to an alternating payee or
  • Divide retirement or pension plans amassed throughout the marriage when a divorce is approved.

The division of retirement or pension plans is decided in a divorce in two typical forms:

  • By means of agreement of the parties or
  • By means of the law court if the parties do not agree

A division of a pension plan or retirement account can be done at the time the divorce is approved.  In almost all cases, a court order is compulsory for the division to be complete.

By utilizing a QDRO, you will collect your benefit directly, helping you both in a long period of time by releasing your spouse from dividing the benefit and also by accounting for tax on both shares. You will have express and legal rights to your interest in the plan.

Who can issue QDRO?

A QDRO has to be issued by a state authority which is normally a court through a decree, judgment, or order, which deal with a property settlement. However, not every domestic relations order is eligible and can divide a pension plan.

What paperwork should I give to lawyer?

The plan document, that is: the complete set of the rules for each pension.

The plan outline booklet for each pension

The evidence of your relationship and that of your children to the plan participant