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What does a QDRO do?

On Behalf of | Dec 19, 2022 | Division of Property

If you’re getting a divorce, there may be many different documents that you’ve never used before, and that you are encountering for the first time. Some of these documents are very useful, especially as you divide up ownership of your assets, but you may simply never have used them previously, and so it can all seem a little overwhelming. Additionally, there are those who aren’t even sure about all of the documents they have the option to use.

One of these documents is known as a QDRO, or a qualified domestic relations order, and it is for dividing retirement funds. It helps you split up benefits that were earned during the marriage. Let’s look at how this works.

Future benefits

The problem with benefits like a pension plan or a retirement fund is that your spouse won’t actually own them yet. That plan could be worth millions of dollars, but it’s not as if they have that money just sitting in a bank account. They haven’t retired yet, and so they haven’t gotten it.

But a QDRO can specify how it should be split up when they do get it. So, if your spouse retires 10 years after the divorce and starts to get a pension payment every month, they will be obligated to send a portion of that payment to you.

How much will you receive?

Exactly how much you receive depends on a lot of different factors, with the length of the marriage being one of the most important. You’re only entitled to assets acquired during the marriage, which means that the percentage of the plan earned while you and your spouse were married needs to be divided between the two of you. This may not be the entire plan if your spouse worked at that business before or after your marriage.

But getting the QDRO in place in advance is important because it defines this percentage, tells you how much you should expect and gives your ex the legal obligation to split the money with you in the future. Be sure you know about all of your legal options and the steps you can take.