While going through divorce, you know that a significant amount of assets is at stake in your retirement investments. This can prove complicated when splitting this money and trying to determine what is and is not a marital asset.
Coming to the rescue is a tool known as a qualified domestic relations order (QDRO), which can unravel some of the retirement investment complications caused by divorce. A QDRO – overseen by a qualified attorney – proves invaluable in determining a spouse’s rightful share from plans such as 401(k)s, 403(b)s, 457s, profit-sharing, pension and employee stock ownership.
Focus on retirement accounts
Understand that in many cases the investments within a retirement plan are not equally divided. And your spouse cannot just hand over the money to you. This is where a QDRO comes into play. A court must order the QDRO or attorneys representing couples in mediation situations agree to it.
An experienced attorney will draft a QDRO that is precise with every monetary detail. The QDRO establishes the amount of money you will receive from your spouse’s retirement accounts. In addition, this document will determine whether interest and additional payments are necessary.
Here is an example. Say that once the QDRO is completed you will receive $700,000 from the retirement savings. However, due to circumstances out of your control, the divorce takes another seven months to become final. Because of this delay, you will receive more money attributed to interest or market-related earnings from that seven-month period.
Doing away with complications
A QDRO strips away the complications and provides a resolution that allows you to get your share of marital assets from your spouse’s retirement accounts.