A Qualified Domestic Relations Order (QDRO) is a court order that is used to divide out retirement or pension benefits after a divorce. It is part of the divorce case, but must be prepared separately from the decree or any other court orders. It can be prepared and submitted at any time, but it is usually best to get it taken care of as soon after the divorce is finalized as possible, so that nothing gets forgotten or mixed up later.
The QDRO (pronounced “quadro”) is an order from the judge telling the company administering the 401k or the pension how to divide it between the parties. It can be divided a number of different ways, depending on the parties’ preferences and the original court order. For example, it can be paid out immediately or at some future date (retirement, for example); it can be paid out over time, or as a lump sum. The exact amounts to be paid can be described either as percentages of the whole or as specific cash amounts, again depending on what the original decree says.
When preparing a QDRO, it is usually best to contact the administrator of the account to see if they have a specific form they would prefer you to use. Using forms or procedures provided by the administrator will help speed the process along and make sure there are no mistakes or misunderstandings.
Once the order is drafted, it must be submitted to the judge for his signature and then the signed order needs to be sent to the administrator of the retirement account. The administrator will then take care of any payments.
Drafting a QDRO can be a complicated process, involving conversations with account administrators, opposing attorneys, and the court. Consider hiring an attorney to help you through the process. Attorneys who prepare QDROs can often speed the process along, and it is usually considerably cheaper than the actual divorce was, since it’s mostly a matter of gathering all the paperwork correctly.