Qualified Domestic Relations Orders
Qualified Domestic Relations Orders:
What are they and why do I need one?
Many divorces result in some type of property division. A large number of those property divisions address some type of deferred compensation i.e. a retirement account. Many of those retirement accounts require a Domestic Relations Order which is a special type of court order dividing the retirement account.
A Qualified Domestic Relations Order (typically called a QDRO) is a Domestic Relations Order that has been qualified by the retirement plan as complying with the law under ERISA (the Employee Retirement and Income Security Act of 1974), or some other statutes that may be applicable, as well as the rules of the plan. Many retirement plans write their own administrative procedures to govern the terms of the plan, what can be divided, and how it can be divided. This is the most complicating factor in drafting a QDRO. To further exacerbate the difficulty of drafting a QDRO, there are different types of retirement plans and different methods to divide those retirement plans. Below is some basic information about QDRO’s and retirement plans.