If your spouse has money in a retirement fund or pension plan, you may need a QDRO during your divorce. QDRO stands for “qualified domestic relations order”. It is a special kind of court order that grants a former spouse the right to receive retirement or pension benefits.
Why Do You Need a QDRO?
QDROs are the only way to protect your right to receive a portion of your former spouse’s retirement or pension benefits. A QDRO is a court order that tells the administrator of a specific retirement plan or pension plan to pay part or all of the benefits to an ex-spouse or child of a benefits recipient. These benefits are part of the property divided in a divorce case. The recipient’s former spouse may be entitled to a portion of them as marital property or alimony. Alternatively, a portion of the benefits might be paid out as child support. Without a QDRO, the plan would pay the benefits directly to the specified recipient.
How Do You Obtain a QDRO?
In North Carolina, it is not enough for the judge to mention the benefits in another divorce-related order. You must obtain a QDRO that contains specific information about the retirement or pension plan and your spouse’s benefits. The QDRO must be signed by the judge in your divorce case.
The language and structure of QDROs can change depending on the retirement or pension plan involved. All QDROs must identify the benefits recipient, the amount of benefits to pay to the ex-spouse, and payment details such as frequency. Have a lawyer prepare any QDROs that you or your spouse need to ensure that you follow legal requirements.
Which Retirement and Pension Plans Necessitate QDROs?
You don’t need a QDRO for every retirement account. Only plans governed by ERISA (the Employee Retirement Income Security Act) and some plans that have adopted rules similar to the ERISA laws necessitate QDROs. These plans have administrators who pay out benefits to plan recipients. ERISA-governed plans include, for example:
- 401(k) plans
- 403(b) plans
- Profit-sharing plans
- Employee stock ownership plans
- Other employer-sponsored retirement plans
If you plan to divorce and you know that you or your spouse has any kind of retirement or pension plan, you need to speak to a divorce lawyer about QDROs. Even if a QDRO is not needed for a particular type of plan, you need to account for the plan’s benefits when dividing marital property. For example, government pensions and disability benefits may not be the type that necessitate QDROs. However, the money that your spouse receives from one of these plans could affect child support or property division.
Be sure to talk to your lawyer about QDROs as soon as possible. You’ll need to find out plan details, have your lawyer prepare the legal documents, and get the judge’s signature during your divorce proceeding. In addition, you have to contact the plan administrator to notify it of the QDRO. All this can take time, but the QDRO is important to protect your rights.
Finally, if you are not sure if you or your spouse have any retirement plans or pension benefits that might matter in property division, speak to a lawyer. Qualified divorce lawyers can help investigate the assets that will be divided in your divorce.
Let New Direction Family Law Assist You
If you are considering ending your marriage and need a QDRO, the team at New Direction Family Law is available today to answer your questions. With decades of combined legal experience, our attorneys are knowledgeable, effective, and compassionate professionals. We will help you understand your legal rights and work hard toward your best outcome. We proudly serve clients in Wake, Johnston, Durham, and surrounding counties. Contact New Direction Family Law at (919) 646-6561 to schedule a consultation, or visit us at our website.