Using a QDRO to divide retirement plans 

On Behalf of | Feb 14, 2024 | High Asset Divorce |

Retirement assets can be fairly complex in divorce. With many other types of assets, you physically possess them at the time of the divorce. For instance, maybe you have a bank account with $100,000 in it. You can theoretically withdraw the money and put $50,000 into two new bank accounts, splitting it between you and your ex.

But a retirement account may not be an account over which either of you has full control yet. Say that your spouse gets a pension and they gradually earn that pension while working. This is still a marital asset that they are earning during your marriage. But your ex won’t actually get paid until they retire, and that could be years in the future. So how do you divide this asset?

A qualified domestic relations order

You can do this by using a qualified domestic relations order (QDRO), which is a court order setting up the distribution rules for the future. The court will consider things like the length of your marriage and the earning capacity of both you and your ex. Generally speaking, you may have a right to half of the portion of the retirement account that was earned during the marriage – though that may be less than half of the entire account, as your ex will continue to earn their pension after your marriage ends.

The benefit of a QDRO is that it can do this division in advance. Your ex may not even retire for 10 years after your divorce. But with the QDRO in place, you know that you will eventually get a percentage of those retirement benefits.

It is very important not to overlook valuable assets during a divorce. Make sure you know what legal steps to take at this time.

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