Why Do I Need a Qualified Domestic Relations Order?

Depending on what point you and your soon-to-be ex-spouse are in the divorce process, you may or may not have come across the term "Qualified Domestic Relations Order," or QDRO, as they are commonly known.

Not all couples require QDROs in their property settlements, but those who do must be diligent and make sure that their attorneys remain on top of the situation and file the documents in a timely manner.

How can I tell if I need a QDRO?

The couples who need to draft and file QDROs are those with one or more retirement accounts for either party. Don't think that if your spouse has a pension but you don't that you must walk away empty-handed.

If the spouse with the pension held the job that earned him those benefits during the marriage, the other spouse is entitled to a portion of those benefits from the marriage.

Why can't that be handled in our property settlement?

QDROs are special domestic relations orders that define and recognize the rights of alternate payees to receive a specific part of a spouse's or former spouse's retirement pension benefits. Additionally, QDROs assign the amount of the benefits to be paid and designate when the alternate payee receives said benefits, and for what duration the disbursements will be paid.

But wait -- there's more

Alternate payees of QDROs are not limited to only spouses and former spouses. They may also be the plan participants' children or other dependents, e.g., a disabled sibling or parent under the care of the plan participant.

Also these legal documents must contain very specific information required by the Employee Retirement Income Security Act of 1974 (ERISA) to be considered to be a QDRO.

While QDROs may require certain plan-specific information, under ERISA, all QDROs must list the following:

  • Full name of plan

  • Participant and alternate payee(s) names and last known mailing addresses

  • Either the percentage of the benefit amount, or a specific amount to be paid out to alternate payee(s)

  • The duration of benefits, e.g., five years, or specific number of payments, e.g., 60.

Where do I find this information?

Each plan has a plan administrator who is responsible for record-keeping and issuing benefits to participants and alternate payees. He or she can provide you with the specific requirements of the plan.

I think my spouse has more than one pension. What happens then?

That is very possible, and if you were married during the times those benefits were earned, you are entitled to portions of multiple retirement pensions. Your Colorado family law attorney can draft a single QDRO to reflect each specific plan to assure that you don't walk away from your marriage leaving money on the table.

Tags: Divorce

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