WHAT IS A QDRO?
A “qualified domestic relation order” (QDRO) is an Order that creates or recognizes the existence of an alternate payee’s right to receive, or assigns to an alternate payee the right to receive, all or a portion of the benefits payable with respect to a participant under a retirement plan, and that includes certain information and meets certain other requirements. An Alternate Payee is defined as a spouse, former spouse, child, or other dependent of a participant.
Military, Federal and State civil service plans, and TSP’s are divided by an order similar to a QDRO, but is called either a Judgment, DRO or Court Order Acceptable for Processing.
CAN’T I JUST USE MY DIVORCE JUDGMENT TO DIVIDE THE RETIREMENT?
Generally, a state court must actually issue an Order separate from the parties’ divorce judgment to divide a retirement plan pursuant to a dissolution of marriage. This is where Attorney Kristine Colburn comes in. She has the expertise to prepare such an Order. She will work with jointly with the parties or with one party to fashion an Order that provides the best possible outcome. Attorney Colburn has been in Family Law for over 17 years and therefore can assist with preparing language for the retirement portion of a Marital Settlement Agreements and ultimately writing the QDRO to divide the retirement plan.
HOW MUCH WILL I RECEIVE FROM THE RETIREMENT PLAN?
Unless the parties have agreed to specific figure as payment from the retirement plan in their Marital Settlement Agreement (MSA) or Judgment a QDRO does not normally list a dollar amount to be received each month in a defined benefit plan. Instead most QDROs use a formula so that the Plan Administrator can determine the amount each party will receive in retirement. Since many QDROs are completed well before the parties retire or begin receiving a share of the retirement benefit, the use of a formula allows for any adjustments to the benefit that may be provided by the Plan prior to payout. Attorney Colburn cannot give advice on the amount of the benefit a party may receive from a defined benefit plan retirement, but if this information is crucial to a party, she will refer a party to a qualified professional to perform the calculation.
SHOULDN’T I WAIT UNTIL MY FORMER SPOUSE IS NEAR RETIREMENT AGE BEFORE OBTAINING A QDRO?
The Courts are increasingly requiring a QDRO to be completed at or near the time of your dissolution. As the Alternate Payee, you may have options in terms of when you can start collecting your share of the retirement benefits. Some plans allow for the Alternate Payee to begin collecting his/her share of the retirement benefits before the former spouse/plan participant actually retires. Furthermore, if you wait until your former spouse is at or near retirement to obtain a QDRO you may run the risk of forfeiting your share of the retirement benefits. Without a QDRO in place, if your former spouse/plan participant quits, remarries, dies, takes out a loan, or becomes disabled, your share of the retirement benefits could be impacted or surrendered.
Click here to Contact Attorney Colburn to discuss your options and secure your rights in your retirement plan now.
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