What is a QDRO?
A Qualified Domestic Relations Order (QDRO) is a legal order the supplements a couple’s divorce or legal separation agreement. A QDRO details the division of retirement benefits between the divorced spouses.
QDROs must comply with the specific rules of the plan and applicable law
QDROs can be part of the Divorce Decree or a separate document
QDROs need to be approved by plan administrators and the court
Things to Understand
It is crucial to identify all plans that qualify and understand what each plan allows. Each plan is unique and has its own nuances. QDROs need to be drafted in a way that is acceptable to each plan’s administrator.
Both parties should review and approve the QDRO. Doing so ensures that your questions are answered, costs are reduced, and benefits are accurately divided.
All QDROs should go through pre-approval, if possible, by the plan administrator before being entered by the court.
Some plans have sample QDRO forms for plan participants. These samples may not include all the plan’s benefits or options, and may not reflect the parties’ agreement. It is important to know what changes need to be made.
QDRO Counsel Services
Take the time to understand your situation
Review all plans to be considered
Gather required plan procedures
Prepare a draft of QDRO
Review draft with each party and attorneys
Submit draft to plan administrators
Gain pre-approval from administrators
Submit QDRO to court
Serve the plan with QDRO
Complete approval process
Answer questions on transfers
Typical QDRO Process
1. Clients obtain updated information on retirement benefits from employer or Plan
2. Family law attorneys evaluate and negotiate marital property division
3. Family law attorneys consider liquidity needs, health, employment and other financial assets for retirement in the division of retirement benefits
4. Family law attorneys negotiate Martial Termination Agreement (MTA) or Judgment and Decree (J&D) language
5. QDRO drafter (“Drafter”) reviews language in #4 and asks questions and indicates
6. Family law attorneys provide Drafter with final MTA or J&D language
7. Drafter contacts Plan’s HR contact or Plan administrator to determine who is QDRO reviewer
8. Drafter contacts QDRO reviewer for sample/model QDROs and QDRO procedures, including review fees, and copy of Summary Plan Description (SPD)
9. Drafter prepares draft QDRO and seeks parties’ review and preliminary approval of QDRO to send to QDRO reviewer for pre-approval
10. Drafter sends draft QDRO to Plan’s QDRO reviewer for pre-approval
11. Drafter makes any changes required by QDRO reviewer and obtains approval of parties to changes
12. Drafter sends execution copy of QDRO to parties and/or their attorneys for signing
13. Drafter sends completely signed QDRO to Court for judge’s signature and ordering of certified copy
14. Drafter serves certified copy of QDRO on Plan
15. Plan acknowledges receipt of QDRO and follows QDRO review procedures
16. Plan officially approves QDRO with any appeal period noted and possibly waived by parties
17. Plan contacts Alternate Payee with distribution documents and options
18. Alternate Payee provides Plan with properly completed forms
19. Plan makes payment of Alternate Payee’s benefits as directed including any withholding of income taxes