In the United States, married couples two most accumulated or collected assets are their home and their retirement accounts. As such these two assets are also often the main source of dispute or discussion when divorcing couples are forced to deal with the division of their assets and liabilities. All states have specific laws dealing with the division of the divorcing parties assets and liabilities. As part of a divorce process, all States within the United States require some type of equitable division of their assets and liabilities. In order to divide most types of retirement accounts, military retirements or pension’s individuals are required to have a Qualified Domestic Relations Order (“QDRO”) or other type of Order dividing such retirement entered by the judge overseeing the divorce case. A great majority of attorneys do not prepare them for their clients because financial specificity to which they must be prepared in each and every case. Often these documents are outsourced to professionals such as accountants or financial planners whose practice is solely focused on the preparation of such QDRO’s to ensure financial accuracy.
The reason QDRO’s have the ability to present problems is that because every retirement plan is governed by their own sets of rules and regulations and plan administrator’s often decline to accept an improperly prepared QDRO which then requires a modification of the QDRO and then having to resubmit it to the judge for signature again which can be very time consuming. We have personally been contacted to assist someone who had prepared a QDRO three separate times and each time it was rejected which ultimately consumed six month’s time unnecessarily. It is important to note that if one QDRO is perfectly acceptable for one plan, it certainly does not mean that the same QDRO is acceptably for another plan. A prudent person should contact the plan administrator and secure contact information for the individual in charge of reviewing the QDRO upon receipt from the court and request a review of a draft QDRO prior to submission to the Judge. This would at least eliminate one potentially bad step of the QDRO being rejected by the plan administrator. Having said that, a very cautious word needs to be said that just because a plan administrator “signs off” on a draft QDRO does not automatically mean that the QDRO is financially correct which is why QDRO’s are best left to the financial professionals.
Robert G. Hetsler, Jr., J.D., CPA, CVA, CFF, FCPA a non-attorney practice which is focused on the preparation of QDRO’s and all other types of retirement division orders that are required as part of the divorce process. Robert maintains a CPA license does not maintain an law license and does not purport to provide any legal advice. To know about qdro solutions and sample QDRO. Please visit our website.