Qualified Domestic Relations Order (QDRO) Laws

If you are considering divorce, it is crucial to talk over the need for a qualified domestic relations order (QDRO). This ensures that money from a divorcing partner's retirement plan can be paid to the other spouse without penalty. A family law attorney can help clients ensure their domestic relations order is properly handled and meets the requirements to be considered a QDRO. 

The attorneys at Galera at Dunsing &Deakins, LLC in Denver, CO and Avon, CO, have over 45 years of combined experience, take a direct approach, and offer a free initial consultation. During your initial visit, we will be open and honest with you about your case so that your expectations remain realistic. We do not use a lot of “legalese”, preferring instead to talk with our clients in terms we all understand. When you partner with us, you are put in direct contact with your attorney so you can get the answers you need, when needed.

What Is a Qualified Domestic Relations Order (QDRO)?

A QDRO is an order, entered during a divorce proceeding, usually at the conclusion, which allows for division of a retirement plan without any penalty. In order for a QDRO to be considered legally binding, certain pieces of information must be included in the order, including the:

• Name and address of the plan participant. This means if it is your retirement plan that is being divided, the QDRO must identify you as the one participating in the plan. The names and addresses of any alternate payees under the plan must also be included in the QDRO.
• Amount of money to be paid. The plan must specifically set forth how much money must be paid. This can be expressed as a dollar amount or as a percentage of the plan’s total.

In order to make sure the order is binding and that payment will be made, you need to ensure the above requirements are met and what
amount you may be entitled to, either in cash or transfer to a new qualified plan. Additionally, a QDRO does not guarantee a limitless payment: it cannot ask for more payment than the retirement plan provides. 

A knowledgeable family law attorney can help you sort prepare an order by reading over the terms of the retirement plan to be used for payment and making sure any QDRO entered in the divorce case complies with the legal requirements set forth above. In fact, not only will your attorney make sure you are protected, but will also make sure the retirement plan is put on notice of the QDRO.

The final step in making sure payments are made as ordered is to provide a copy of the QDRO to the retirement plan administrator. Your attorney will handle this for you, as well as any follow-up questions the plan administrator may have, ensuring all concerns are answered correctly and that the payments ordered are made as intended.

Can I Get Benefits without a QDRO?

It is critical to understand that if one spouse is awarded any portion of the other’s spouse’s retirement plan, the only way the funds in a retirement plan will be divided is if there is a QDRO on file in the divorce.

The ultimate benefit of having QDRO in place is to ensure proper division of the plan. The order acts as a safeguard of assets for the person entitled to receive a portion of the funds. During the course of a divorce, the court may order that the parties split a retirement plan. However, without the actual plan, the administrator is not bound to follow that order. The lack of a QDRO means that while the court may have given you a portion of your ex-spouse’s retirement account, the plan administrator does not have to make payment to you. But, with a valid QDRO in place, the administrator for the retirement plan has no choice but to divide the funds and pay you what is due.

The lack of a QDRO means that while the court may have given you a portion of your ex-spouse’s retirement account, the plan administrator does not have to make payment to you.

Can I Draft My Own QDRO?

Many times a party to legal action will try and take on some of the tasks themselves, in an effort to save money. However, drafting a QDRO is not one of those times you would want to take on any of the work in your case by yourself. If a mistake is made in the order, the benefits will not flow, and this can ultimately cost you thousands of dollars in the end.

The price of a qualified attorney is worth the peace of mind in knowing your case will be handled properly. Furthermore, hiring an attorney can ultimately save you money at the end of the day. While it might seem feasible to speak with the plan administrator or an accountant about what is needed for your QDRO, those individuals typically lack the legal background needed to ensure the final product passes legal muster.

Our approach is one that includes talking to you about your needs, listening to what you need, and giving you an honest answer about what to expect during your case. Let us put our years of valuable insight and knowledge to work for you today.

Contact Us for More Information

If you have questions about Qualified Domestic Relations Orders (QDRO), contact us online, or call us in Denver at (303) 758-8981. We look forward to working with you and scheduling your free initial consultation today.