What is a QDRO?
A QDRO (or Qualified Domestic Relations Order) is an order required by your plan administrator to split up your ERISA qualified account. This is a short definition, but contains a lot of information. You probably have some questions, such as “What is a plan administrator?” and “What is ERISA?” Your plan administrator is the person/company in charge of your retirement account. It is their duty to make sure that your money in your retirement account is secure and not used for improper uses that would then make it taxable. ERISA is the law that allows your retirement account to be tax free until you retire.
All of this means that you need a QDRO to tell the plan administrator that it is appropriate to divide up your 401k, pension or other ERISA qualified account with your former spouse, and to maintain a tax exempt status on those funds. The plan administrator would be liable if they allowed this to happen without a QDRO. This is why you need a QDRO.
How Do We Do Your QDRO?
Generally speaking, it’s our preference to assist your family law attorney with drafting the language in the decree for your QDRO. This is because we often see vague language that requires your family law attorney to relitigate the decree in order to complete a proper QDRO. We do work with people that are post decree, and doing their own divorces as well. Just remember that a QDRO can only do what the decree says, so a badly drafted decree prevents a QDRO from taking effect.
Because of this we focus on using one of our core tenets, Collaboration, to complete your QDRO in the most efficient manner possible. We collaborate with your attorney, you and your opposing party, in order to, draft a decree and a QDRO that reflects your desired outcome.
Please contact us immediately if you need a QDRO. Our pricing is a base price for a typical 401k split.