A “QDRO” is a Qualified Domestic Relations Order. These orders are required for the parties in a divorce action to properly divide certain retirement assets. 401(k) Plans, 403(b) Plans, defined benefit or defined contribution pension plans, and a handful of other retirement assets generally require the preparation of a QDRO before the retirement company will apportion either party’s retirement funds. QDROs can be fairly complicated, and most retirement Plans have templates that they recommend using to speed the process of approving the order so that it may be entered by the court.
The process for obtaining a QDRO can be confusing. The parties must first “join” the retirement Plan in the underlying divorce action. In other words, the Plan must become a party in the case. Plans require this first step to ensure that the judge who signs the Marital Settlement Agreement or Judgment has the jurisdiction to order the Plan to divide the retirement assets. This “joinder” is accomplished through a variety of forms designed for this express purpose, and Plans generally understand them and sign off on the requested joinder. Once the Plan is joined in the action, the parties must then value the community property portion of the retirement account. This step can be made more difficult if the retirement plan existed prior to marriage (and thus contains separate property), or is in pay-out status at the time of the order. Nonetheless, it is generally a good idea to have an expert evaluate the retirement assets in order to ascertain the community property interests in them. Once the assets have been valued, and the parties have agreed to their division, the formal QDRO must be prepared for the signatures of the parties, the attorneys for the parties, the Plan Administrator, and the court. As noted, the Plans themselves usually have a template, but it is advisable to have the expert who valued the accounts review the template to ensure that it complies with the governing federal ERISA laws. Once the QDRO is fully executed, it is filed with the court, and the resulting signed order will enable the Plan to divide the retirement as ordered.
QDROs are complicated, and it is not advisable for a self-represented party to attempt one without assistance. My office has extensive experience in the QDRO area, and would be more than happy to discuss your options for dividing the retirement assets at issue in your divorce.