Qualified Domestic Relations Order (QDRO) Drafting
A qualified domestic relations order (commonly referred to as a “QDRO,") is an additional order that one may need following a divorce. A QDRO is a document that deals explicitly with pension funds or 401k plans, basically, any plan that is governed by ERISA and considered a “qualified plan.” A QDRO must be prepared and certified by the court, and then provided to the administrator of the account that will be divided. Without this document, the administrator has no legal basis for taking funds from their employee's account and transferring them to someone other than their employee. Without this document, it cannot happen.
Why Get a QDRO Right Away?
Unfortunately, in the early days of practice, we did not prepare QDRO’s for our clients, and we found that they often didn’t get done. Once the divorce was final, the clients would file away their court documents, never to be looked at again. Which, of course, has a detrimental outcome for the spouse who was expecting to receive, ½, or more, of their ex-spouses’ retirement.
Realizing this gap and knowing why it happens, we chose to start drafting QDRO’s for our clients. We are therefore able to ensure they are completed and adequately handled before the clients hide everything away at the end of the process. Plus, our divorce mediators typically have most of the information we need as part of the overall divorce process, so it is an efficient service to offer our clients. Moreover, because it takes less time to track down all of the information since we already have it in our files, it takes less time, and therefore, we can charge less than a lot of other firms.
Questions? Just Ask!
There are special rules for divorcing couples when it comes to the disbursement of qualified retirement accounts. Be sure to ask your mediator about the options you have available when discussing your retirement accounts. There is money to be saved, and you should be aware of your options.
The cost of having a QDRO prepared is not included in a standard mediation package*, as it is not a necessary document in every case. However, it can be added to any package you do choose.