Conflict over property division is relatively common during divorce, but especially when a retirement or pension plan is involved, which can make up a substantial portion of a divorcing couple’s net-worth.
Dividing these funds can be difficult, given the steep monetary penalties that come with cashing out early. To avoid these penalties, many people turn to Qualified Domestic Relations Orders. A seasoned property division attorney can help you draft an order that will hold up in court. Before you attempt to draft one on your own, consider meeting with a Fulton County Qualified Domestic Relations Order (QDRO) lawyer first.
A QDRO, typically issued by a state court, indicates to pension and retirement plan administrators how and when funds and assets should be distributed.
This approach differs from simply liquidating or transferring ownership of a retirement plan in that it does not trigger unwanted tax consequences. Avoiding transfer fees and early withdrawal tax penalties makes a QDRO a viable option for many divorced couples in Fulton County looking to distribute retirement or pension funds.
Every QDRO must meet certain requirements and include the following information to be considered valid by a court of law:
Failure to address these critical concerns could render an order invalid and lead to serious tax consequences for both spouses post-divorce.
It is important to note that not every retirement plan or pension fund will require a Qualified Domestic Relations Order. Certain plans and accounts can be divided without the need for a QDRO. This is because not all retirement benefits are governed by the Employee Retirement Income Security Act (ERISA). Federal law will not prevent the liquidation or distribution of some accounts – including self-managed IRAs.
Identifying whether or not a QDRO is necessary is one of the ways a Fulton County attorney can help. When these orders become an important part of post-divorce planning, a lawyer can help draft a Qualified Domestic Relations Order that would result in an equitable division of funds.
It is crucial to pursue a QDRO as soon as it becomes clear that the division of a retirement or pension account might be at issue post-divorce. It is important to not only draft a QDRO right away, but to also ensure that it is accepted by the plan administrator in order to avoid missing out on benefits when the person contributing to the plan passes away or is fired, for example.
Whether or not your retirement plan or pension is subject to a QDRO is a question best answered by legal counsel. With a viable QDRO, you can effectively avoid costly taxes and fees that could otherwise eat up your retirement funds.
Now is the time to learn more about your options. Call a Fulton County Qualified Domestic Relations Order lawyer today.