Although rarely (if ever) planned, more than 50% of marriages end in divorce. When a couple divorces or legally separates, the parties will divide their debts and assets in accordance with the terms of the final Decree (or Order).
In some situations, one spouse is able to set aside a significantly larger retirement savings than the other spouse (e.g, if one spouse stayed home to raise children while the other pursued a career). In such cases, a common tool utilized in divorce cases is a Qualified Domestic Relations Order, also known as a QDRO (pronounced "quadro"), which allows the Court to divide or reassign retirement benefits (such as pensions, 401k accounts, etc.) without incurring penalties for early withdrawals.
A QDRO must contain certain specific information, such as the participant and each alternate payee’s name and last known mailing address and the amount or percentage of the participant's benefits to be paid to each alternate payee.
It's important to work with a legal professional, experienced in handling QDRO issues, who can help you navigate through the process of communicating with Plan Administrators, preparing the case pleadings, and ensuring your QDRO meets state and federal guidelines.
Contact Glover Court Solutions today to discuss your legal needs!