Qualified Domestic Relations Order (“QDRO”)

Retirement accounts, to the extent that they are earned during the marriage, are marital property subject to division. It is very often that a retirement account is divided as a part of the equitable division of assets in a divorce. This is the transfer of funds from the account holding spouse (known as the “Participant”) to the non-account holding spouse (known as the “Alternate Payee”). For many of these retirement accounts, a Qualified Domestic Relations Order (“QDRO”) is required to properly divide the account.

A QDRO is a court order that directs a financial institution or employer to divide a retirement account and how it is to be divided. QDROs are necessary to divide your most common retirement plans, like 401(k)s and pensions. Similarly, there are a number of other government-based retirement plans, such as military pensions or federal pensions that require a different, specifically tailored order for division, like a Military Pension Division Order.

A QDRO will specify how the account is to be divided, whether by a percentage or by a specific dollar amount to the Alternate Payee. A QDRO can also specify how the Alternate Payee is to receive his or her interest in the account.

It is important to note that an Alternate Payee is not always the former spouse. While QDROs are used the vast majority of the time to transfer funds to an account for the former spouse as division of property, QDROs can also be used to address child support or alimony payments.

Since QDROs can be complex, not all family law practitioners are familiar with them or how they work. If you are facing a situation in which a retirement account is likely to be divided in your case, give us a call at 770-939-1939 or send us a message.