Do you need a QDRO during your divorce?

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Do you need a QDRO during your divorce?

If you are thinking about ending your marriage, you may have some concerns about your financial future. Fortunately, you are likely to end up with roughly an equal share of the marital estate. You may also be eligible for spousal support to help you make ends meet after your divorce.

While dividing your home, vehicles, cash and savings may be straightforward, your retirement accounts may be a different matter. That is, in California, the typical process for dividing marital assets may not work for retirement funds. Consequently, you may need to obtain a qualified domestic relations order during your divorce.

What is a QDRO?

In simple terms, a QDRO is a court order that directs the retirement plan administrator to pay funds to you instead of your spouse. Judges in California may not automatically issue a QDRO. Accordingly, your divorce attorney may need to petition the court for one.

When do you need a QDRO?

Not all retirement plans require QDROs. Still, if your spouse has a private pension, an IRA or a 401(k), you probably need to request one. On the other hand, many government and military pension plans are exempt from the QDRO requirement. Likewise, any plan that does not operate under the Employee Retirement Income Security Act of 1974 may not require a QDRO.

How does a QDRO work?

A QDRO tells the plan administrator how much of your spouse’s pension you should receive. It may also dictate the number of payments or time period for payments. Essentially, the QDRO works by giving the plan administrator the information necessary to pay benefits appropriately.

Your and your spouse’s retirement accounts may be a substantial part of your marital estate. Ultimately, by knowing when and how to obtain a QDRO, you can be certain you receive the retirement funds you deserve after your divorce.