The short answer to this question is you should not wait for retirement to file a QDRO! If you delay filing a QDRO, and wait until your ex-spouse retires or you need the money, you may lose valuable rights or even lose some benefits that you are entitled to receive. I never say that lightly and never use it as a scare tactic. It comes from genuine concern over unfinished divorce matters which we see daily. I am going to jump right into the “why” and the “if you don’t” as it is truly one of those topics that often are unaddressed.
It is quite common for the retirement account to (1) NOT be correctly named in the divorce judgment and/or (2) to be omitted entirely from the divorce judgment. Once you provide the name of the employer, union, or public entity which sponsors the retirement account, QDROCounsel can help make sure you identify the plan to be divided and also can help make sure you are not missing any additional plans to be divided by the employer. QDROCounsel can always provide good waiver language for the divorce decree if the participant should be awarded the entire retirement account with no payment to the former spouse.
You will be prompted to answer basic questions regarding how the retirement account should be divided. If you are not sure, you can always schedule a telephone call with a QDRO Expert who will explain the most common questions and areas of concern for most people in order to provide a deeper understanding of how the retirement benefits are being divided for the divorce language.
You will then receive sample divorce judgment language in a Word Document. You can add this language to your divorce document in the retirement benefit section. If selected by the customer, the divorce judgment language will include a specific award for survivor benefits to make sure the former spouse receives his/her interest in the plan if the participant dies or retires. Including a specific award for survivor benefits in the divorce judgment is very important since failure to do so may result in loss of benefits.
“The divorce judgment awards the former spouse an interest AND the QDRO facilitates the ability for the plan to pay benefits directly to the that former spouse. These are separate documents. You can prepare the QDRO at any time but if possible it is best to draft the QDRO before you finalize the divorce judgment language (1) to protect against any issues that may arise before the divorce is final and (2) to protect the former spouse’s interest in the plan. The former spouse’s interest in the plan is not secured until the QDRO is completed.“
Do the QDRO now even if the payout is some time in the future. People falsely think they should wait to do the QDRO if the payout from the plan will occur in the future. Don’t fall into that trap! If the participant dies or retires before the QDRO is done, the former spouse will likely lose the benefit!
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