Why You Need a QDRO to Divide Your Retirement Accounts After Divorce

Among the most valuable assets to be divided during a divorce are retirement accounts, such as pensions, 401(k)s and IRAs. However, the process of transferring the money from one spouse to the other does not happen automatically when the divorce is granted. Most retirement plan providers will not release funds without a qualified domestic relations order (QDRO). Unfortunately, a substantial number of ex-spouses may not be receiving the retirement assets to which they entitled.

The QDRO is a judge’s order that authorizes and instructs plan providers to split the assets in a pension, 401(k), 403(b), 457 plan or employee stock ownership plan (ESOP). Division of IRAs requires an order called a “transfer incident to divorce,” which serves the same purpose as a QDRO.

Despite the importance of QDROs, many people do not obtain them. In our experience, perhaps 25 percent of divorces are completed without a QDRO. In addition, many QDROs are prepared poorly, which can cause complications that make it difficult for a spouse to receive their fair share of funds.

Precision is extremely important in creating a QDRO. An important element of that is contingency planning. For example, what should the QDRO instruct the plan to do if a spouse passes away? Or, what if your ex-spouse keeps working well past retirement age? Our New York divorce lawyers will prepare a QDRO that fully addresses these issues.

QDRO preparation requires a good deal of knowledge about retirement plans, which our lawyers have obtained after many decades of handling these issues. When we handle a QDRO, we cover every base, including:

• Reviewing your divorce decree or settlement closely
• Drafting a QDRO specifically to address the accounts, amounts and timing involved
• Obtaining signatures of all parties
• Submitting the order to a judge for approval
• Sending the QDRO to the retirement plan provider for processing

Additionally, we review any QDRO prepared by your spouse’s attorney. This review is critical because QDROs are not neutral documents. You need your own lawyer to make sure the document truly protects your financial interests.

If you are divorced or getting divorced and have concerns about division of your retirement accounts, talk to the lawyers at Bryan L. Salamone & Associates, P.C. We can create a QDRO or review one provided by your ex. Our QDRO services cost $1,450 for the first five hours, $345 for each additional hour, plus $600-$900 in actuarial costs. Call 1.631.479.3839 or contact us online to discuss your needs. We serve clients in Suffolk County, Nassau County and throughout Long Island.