There are many factors that need to be considered when couples divorce. For individuals who have certain retirement accounts, the fate of those accounts is one of these. When both spouses have accounts that are fairly equal, they might each keep their own.
Dividing these accounts becomes more complicated when one is much more valuable than the other or when only one spouse has a retirement account. The property division agreement or judgment stipulates which spouse gets what from the community property.
However, the plan administrators typically are not satisfied with a mere divorce judgment when it comes to dividing pensions in divorce. Instead, they accept a qualified domestic relations order signed by the family law courts.
What is the QDRO?
The QDRO is a specific document the court issues that instructs the retirement plan administrator on how to divide the assets — and to whom. Once the document is given to the administrator, it’s reviewed to determine if there is anything amiss. It’s possible that the administrator will send it back to the court for clarification if there are any issues with it.
If everything is in order with the QRDO, the plan administrator will divide the retirement account in accordance with the terms. Typically, this involves moving part of the account into a new retirement account that’s overseen by the original plan-holder’s ex.
Dividing assets in a divorce can be complicated. Working with an attorney who is familiar with your situation and your goals can be beneficial. Remember that the retirement accounts are only one factor that you need to think about when you’re going through a divorce.