On behalf of Duff & Kronfeld, P.C. posted in blog on Tuesday, November 28, 2017.
Anyone considering divorce does a service to him or herself by learning all they can about it before starting the process. One way of looking at divorce is as a major campaign. There is always an emotional toll for both spouses, even in the most amicable of divorces. If children are in the equation, the challenge increases. And there is always the matter of property division to contend with.
In the course of trying to understand the finer points of asset division, it’s possible readers will come across the term, “qua-dro.” That’s not actually a word. This is the pronunciation of the acronym QDRO – formally known as a Qualified Domestic Relations Order. It is a tool available under family law in every state designed to address the often-overlooked asset in a couple’s property portfolio – their retirement plan.
A QDRO grants retirement benefits access to an ex
When a couple divorces, the standard issues related to the dissolution are covered under the Final Order of Divorce. Topics such as child and spousal support are also addressed in the divorce order. If there is tangible marital property, such as a house or a car, that too gets covered in a DRO. But where retirement plans are concerned, special handling is required.
That’s because retirement funds are typically employer-sponsored and are payable only to the participating employee and his or her spouse in the event of death. If a couple divorces, the beneficiary standing of the spouse disappears. A QDRO from the court, however, makes it possible for benefits to go to the ex as an alternate recipient while the participating employee is alive – without the penalty for early withdrawal that might normally apply.
It is worth noting that a QDRO is the kind of order that applies to retirement plans through private employers. State and federal government workers often have different plan structures. Dealing with those funds will probably still have to be addressed through a QDRO, but it might be referred to using the term COAP, or Court Order Acceptable for Processing.
Regardless of what sector you work in, preservation of retirement assets is obviously important. If you are the spouse of a working person and divorcing, preservation of those assets is of equal importance for securing your financial future.
If you are going through a divorce and need assistance in insuring your receipt of your share of your spouse’s retirement funds, call an attorney at Duff Kronfeld & Marquardt P.C. for a complimentary 30-minute consultation. (703) 591-7475.