When married couples divorce, the contents of any retirement or pension plans are part of their marital property. Often, the divorce settlement provides one spouse with a portion of the other spouse’s retirement savings or pension. However, most plans require a Qualified Domestic Relations Order (QDRO) to distribute funds to someone other than the person named on the account.

If you are considering getting a divorce or are in the process, and retirement funds or pensions are part of the marital property, speak with a Cummings Qualified Domestic Relations Order lawyer as soon as possible. They can help you file the QDRO and ensure you get your payments as agreed. Reach out to our dedicated team of division of assets attorneys to learn more.

What is a QDRO?

Most pension funds and employer-sponsored retirement plans are governed by a federal law called the Employee Retirement Income Security Act (ERISA). ERISA requires that money in an individual’s pension is paid only to the named account holder or, if they die, their named beneficiaries.

If the account holder is still alive, but a portion of the account should go to someone else, ERISA requires proper authorization before the plan pays the funds. Plans require a court order proving that a former spouse is entitled to be paid from the fund and a QDRO directing how to disperse it.

Some plans have their own QDRO forms, and some accept any form with the required information. In general, and especially when the accounts contain substantial sums, it is best to have an experienced Cummings QDRO attorney draft the document or complete the plan’s QDRO. They can ensure that it covers all relevant points and correctly sets forth the parties’ agreement.

QDROs Benefit Both Parties

Getting a QDRO benefits both spouses. It informs the plan how to disburse the funds, which ensures the receiving spouse will receive their share on time. The spouse whose name is on the account cannot withdraw the money that is earmarked for the other individual.

A QDRO also ensures that the receiving spouse is responsible for any taxes due on their portion. Without a QDRO, the spouse whose name is on the account would be liable for any taxes and penalties when the money is withdrawn, even though the spouse receives it.

Process for Obtaining a QDRO

Once an individual and their spouse have agreed on how to distribute the funds, an attorney will draft a Domestic Relations Order (DRO) outlining your agreement. Before either party signs, the attorney can submit it to the plan administrator to ensure it meets the plan’s requirements. If there are multiple accounts, a separate draft order is needed for each account. Not all plans will pre-approve domestic relations orders, but if they do, it could shorten the time frame for the QDRO to be effective. A knowledgeable QDRO attorney in Cummings is familiar with the requirements different plans impose and can draft the agreement accordingly.

Once the plan has approved the draft order, both parties will sign and submit it to the family court handling their divorce. The court will certify and enter it as part of the divorce decree. Once the document has court certification, a legal professional will submit it to the plan administrator. The plan has up to 180 days to decide whether the order is “qualified,” meaning it meets all requirements.

Work with a Cummings QDRO Attorney When Dividing Retirement Funds

Splitting a retirement fund could be one of the sticking points when dividing marital property. After all the work you put into reaching an agreement, make sure your wishes are carried out with a QDRO.

A Cummings Qualified Domestic Relations Order lawyer understands how to draft effective documents that the retirement plan administrator will approve. Reach out to our skilled team to learn more.

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