Often referred to as “QDROs”, Qualified Domestic Relations Orders are frequently used to divide marital retirement assets. If you have a concern regarding retirement assets or QDROs, contact an experienced family law attorney at BoykoNapier today.
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What does a QDRO do?
- A Qualified Domestic Relations Order typically operates to order a financial institution to divide a retirement account between spouses.
- For example, if a husband and wife are obtaining a divorce and there are marital assets in the husband’s retirement account–let’s say, it is a 401(k)–the QDRO would be sent to the company who holds the 401(k) and, in essence, ask the company to create two accounts–one for the husband and one for the wife. The QDRO would dictate how much of the husband’s retirement account would go to the wife (usually, 50% of the marital share).
- A QDRO can also divide up a pension plan, or even a military retirement account.
Why would I need a QDRO for Retirement Assets?
- If you are in the process of getting a divorce and there are marital retirement assets in the name of you or your spouse, it would be wise to consider the use of a QDRO. A QDRO is helpful in that it will often avoid the need to pull money out of retirement to resolve asset distribution issues (with many accounts, premature withdrawals can yield hefty penalties).
- You may ask: “How do I know if retirement assets are marital?” The safe and easy answer is: ask an attorney! It often depends on the circumstances, but generally speaking, if a spouse contributed to a retirement account during the marriage, those contributions and the attending financial gains/losses may likely be considered marital property.
Who handles the QDRO process?
- Usually, the process of drafting and finalizing a Qualified Domestic Relations Order is a joint effort between the attorneys and the entity (or entities) in charge of the retirement assets. Most companies offer a template for QDROs that is adapted and submitted to the company for approval. The process can be time consuming and complicated, hence the strong suggestion that you utilize an experienced divorce attorney to assist with the process.
The attorneys at BoykoNapier are experienced in handling the division of retirement assets. If you have a question regarding retirement or QDROs, call us today at (804) 658-3418. We handle cases throughout Central Virginia, including Richmond, Henrico, Hanover and Chesterfield.
