Why Is It So Important to Have a Properly Drafted QDRO?

When you are entering in the process of an Arizona divorce, it is imperative that you have a qualified domestic relations order (known as a “QDRO”) if retirement benefits, such as a 401(k), will be split between the two spouses. Retirement benefits may be awarded during the property division part of your divorce. If this is the case, it is not enough to have a divorce decree that stipulates that one or both parties owe retirement benefits to the other.

Why the Divorce Decree Is Not Enough: Intro to QDROs

Instead, it is important that you also have a qualified domestic relations order.  It is typically drafted by a third-party attorney who is skilled and knowledgeable in this area of law. This is the official order that is signed by the judge and approved by the plan administrator to carry out the division of these assets. If you do not have a properly drafted QDRO, you could find out too late down the line.

If, for example, you fail to include survivor benefits inside your qualified domestic relations order, a spouse who was counting on these benefits to help support him or her through retirement may be devastated to learn that the other spouse passing away has negated any of his or her benefits. It is very important that you consider all possible aspects when putting together a qualified domestic relations order.

You should take the QDRO seriously, as retirement benefits may be some of the biggest assets divided during your divorce. Make sure your attorney has included all retirement plans that were ordered to be divided during the divorce, because it’s very hard to accommodate changes down the line. The QDRO should be done properly the first time around.

The QDRO Should Match the Decree’s Orders

You want to ensure that the QDRO accurately stipulates the requirements listed in the divorce decree and that it has been accepted by both the judge and the plan administrator. Bear in mind that the plan administrators may have specific requirements you need to follow for various plans. You should also carefully consider any and all retirement plans that may fall under this category. For example, if your spouse has had multiple employment situations with retirement benefits, you want to know the details about all of the accounts for which he or she has benefits inside. This can protect your own future.

This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding A Properly Drafted QDRO, or other family law issues, please feel free to contact Lindsay A.M. Olivarez at 480.461.5300, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.