When thinking about pension plans, retirement plans, and a QDRO, the question comes to mind, “What Pension Plans and Retirement Plans Need a Qualified Domestic Relations Order?” If your divorce settlement agreement or Decree after a Trial states that you’ll receive benefits from a 401(k) or a pension plan, the court must also request a qualified domestic relations order, frequently referred to as a QDRO.
What Plans Are Excluded?
There are some retirement plans that have their own rules regarding division over the course of a divorce, including city, county, state, federal and military pensions. If the retirement plan in question does not fall into these categories, however, the qualified domestic relations order is not only recommended, but is necessary in order for the alternate payee to receive benefits. If your spouse does not work for the government and has access to retirement plans that the judge has ordered divided in the divorce process, you will need a QDRO.
What Does a QDRO Do?
The qualified domestic relations order allows the funds in a retirement account to be separated and given to an alternate payee (without tax or liquidation penalty) by depositing them into the alternate payee’s account. It is important to initiate this process by consulting with a knowledgeable Arizona family lawyer who has handled cases involving qualified domestic relations orders before.
What Can Happen with an Improper QDRO?
Without a properly written qualified domestic relations order, you may be risking your eligibility to receive funds, even if your divorce order and final decree clearly states that you would otherwise be entitled to these. It is imperative to follow the rules of the road when it comes to putting together a qualified domestic relations order as well as any additional rules stipulated by the plan itself.
Make sure to consult with an Arizona family attorney who understands the importance of getting things correct the first time around. Since retirement benefits are frequently one of the biggest assets involved in division of property during the divorce, it is imperative that you consult with someone who understands the implications this could have on your life now and well into the future. Consult with an Arizona family lawyer who you can count on to handle such an important issue professionally.
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 Pension Plans, Retirement Plans, and a QUDRO, or other family law issues, please feel free to contact our Family Law Section 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.