In order to effectively divide a qualified plan – including pension plans, profit-sharing plans, and 401(k) plans – a Qualified Domestic Relations Order (QDRO) must be entered by the Court. It is not sufficient for your separation agreement or divorce decree to state that you are entitled to a portion of your spouse’s retirement. The administrator of the plan will not pay your share to you without a QDRO which is signed by a judge.
A QDRO is not needed to divide a non-qualified plan such as an individual retirement account or an annuity. The Qualified Domestic Relations Order provides a safeguard for the ex-spouse receiving a share of the pension in that it prevents the employee spouse from disposing of the other spouse’s share. It also ensures that each spouse receiving a portion of the pension or retirement becomes responsible for his or her individual share of the income taxes due on that money.
Lee is the founder of Rosen Law Firm and, while retired, still lives on through this website, a huge repository of information to help educate people about family law. It demystifies the divorce process, sharing the secrets and information that other lawyers normally try to keep hidden. Today, this website contains a vast assortment of webinars, legal forms, statutes, Q&As with lawyers, audio and video courses, articles, and lots more.
