In divorce, details matter. Making sure the right forms are completed and filed can make all the difference between receiving the assets to which you’re entitled, and wondering what happened.

If you’re divorcing or already divorced and/or receive child support, a Qualified Domestic Relations Order (QDRO) may be required to receive your share of the retirement assets or collect unpaid child support and/or maintenance arrears.

What It Means

According to the IRS:

A QDRO is a judgment, decree or order for a retirement plan to pay child support, alimony or marital property rights to a spouse, former spouse, child or other dependent of a participant. 

A QDRO may be required in order to divide a retirement plan following divorce.  Not every retirement plan must be divided by a QDRO but nearly all 401(k) or 403(b) plans will require a QDRO to transfer some of the account from one spouse to the other. The Plan Administrator receives the QDRO and then distributes retirement assets to an alternate payee (the other spouse) per the terms of their divorce.  Not all retirement plans require QDROs.  For example, you do not need a QDRO to divide an Individual Retirement Account (IRA).  Some government plans also cannot be divided by QDRO.  Your attorney should know the difference between various plans and determine how to divide each plan. 

QDROs can also be used to pay unpaid child support and maintenance owed. 

How It Works

1. Your attorney will need to obtain the Summary Plan Description which lays out the options to a transferee spouse and the process for submitting a QDRO for the transferee spouse to have the account or a portion of the account transferred into their name.  Sometimes a plan will have a model QDRO to be used.
2. A draft of the QDRO is submitted to the Plan Administrator (sometimes required, but not always).
3. Both the transferor and transferee (called Participant and Alternate Payee) will need to approve and sign the QDRO.
4. One of the attorneys, typically the attorney for the transferee spouse/Alternate Payee, files the QDRO with the court for approval.
5. Once signed by a Judge, the QDRO is sent to the Plan Administrator for processing and division of the account.

If your divorce agreement requires that a retirement account must be divided by a QDRO, or if your ex owes back child support or maintenance, ask your attorney for more information.  Your attorney should be skilled in this area of law as drafting and preparing QDROs can be quite complex.

For more information:

IRS – Retirement Topics

Investopedia – How a QDRO Works

The highly experienced attorneys at Jones Family Law Group, LLC, can provide all the legal guidance you need.