Matrimonial and Family Law Blog

Friday, May 12, 2017

Qualified Domestic Relations Orders - What They Mean for You

When you and your spouse divorce, the assets either of you reserves for your retirement years can be divided proportionally after divorce. A Qualified Domestic Relations Order (QDRO) exists for this exact purpose.

If you are going through a divorce and want your spouse’s retirement account included as part of marital property, call a New York divorce lawyer to file for a QDRO to help you do just that.

What Is a QDRO?

A QDRO is a court order authorizing the distribution of a pension or retirement benefit to an alternate payee such as a former spouse. It authorizes the distribution of property in the form of your former spouse’s retirement pension, together with any tax-deferred retirement fund such as 401k, 403b, KEOGH and TSP plans. The order covers both defined contribution and defined benefit plans.

How Do I Obtain a QDRO?

Immediately after a divorce where you have been granted a marital portion of your former spouse’s retirement benefits, your lawyer should file extra paperwork to obtain a QDRO. This QDRO should be signed by the court granting it and qualified by the pension administrator of a private employment retirement plan. Once it is received, it should be presented to the administrator of your former spouse’s retirement plan, from where it will be added to your former spouse’s file so that when the time for payment arrives, your claim is recognized.

A QDRO is actually the only way the administrator of your former spouse’s pension will know there is a court-approved standing alternate payee to their employee’s retirement plan. Therefore, a QDRO is what gives effect to a divorce order declaring the division of a marital portion of a retirement fund.

How Much Does a QDRO Guarantee?

A QDRO does not necessarily mean you will receive part of your former spouse’s entire pension. It only applies to the marital portion of your spouse’s pension. You only receive a part of your spouse’s portion of marital pension.

Marital pension is calculated by dividing the number of years the two of you were married while your spouse was working with the number of years your former spouse worked. This fraction will give the marital portion. It should be clearly described in the QDRO.

The percentage of the marital portion you receive will be what the court determined to be an equitable distribution of marital property. It is often 50 percent but it may be lower or higher, depending on what the court deems just.

If the court awards you 50 percent of all marital property, inclusive of retirement benefits, you will be entitled to 50 percent of the marital portion of your former spouse’s pension. If it awards 30 percent, you only get 30 percent of the marital portion of your former spouse’s pension.

What to Look Out for in Obtaining a QDRO

Many divorce lawyers forget to file the paperwork required to receive a QDRO. When this happens to you, your former spouse will, upon retirement, receive his/her entire pension check. They can continue doing this for years, without being detected. Unfortunately, once the checks are paid, they may be irretrievable. Ensure your lawyer actually applies for one after you are awarded a portion of your former spouse’s retirement plan benefits.

Ensure your attorney supervises the process of drafting the QDRO, or at least goes through the QDRO issued by the court. Many times a judge may delegate the drafting to an actuary who may not include every provision outlined in the divorce judgment or may not comprehensively describe the marital portion of your former spouse’s pension. If the court signs and wrong QDRO, you may lose a significant portion of your former spouse’s retirement plans.

Verify that your attorney actually sends the QDRO to your former spouse’s work place and that it is filed. If not, their employer will have no way of knowing that you are eligible to receive a portion of the employee’s or retiree’s pension.

To avoid all these dangerous pitfalls that could cost you tens of thousands, have a qualified New York divorce lawyer from the law offices of Gassman Baiamonte Gruner, P.C. handle your divorce and file for a QDRO today.

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