Things to keep in mind when dividing retirement plans

| Sep 28, 2020 | Blog, Family Law

The process of divorce is no easy journey and can often be riddled with obstacle after obstacle. One of the most common errors that people in Pennsylvania and throughout the country make during the process is forgetting to include an order regarding their retirement plans. Because many divorces happen long before retirement is even on many couple’s radar, they won’t even touch the issue. However, failure to do so can place retirement at risk. Here are a few things to keep in mind.

What is a qualified domestic relations order?

In simple terms, a QDRO is a legal order often placed by the courts that allows one person to have a portion of the other person’s retirement benefits. The person who was able to add to their retirement plan is usually called the “participant” with the person receiving the benefits called the “alternate payee.” Benefits will be provided to the alternate payee during and after their spouse’s death.

Why do I need a QDRO?

The law within many states requires that a QRDO is created before any retirement benefits can be distributed during or after the divorce. Although the order can be obtained years after the divorce has been finalized, it is highly recommended to get that order crafted and done as soon as possible.

How would I obtain a QDRO?

One way to obtain a properly crafted QDRO is to seek the services of a professional attorney with experience in legal finance. Once that is done, you need to make the courts aware of your request. Last on the list is to make sure that your spouse is providing all the necessary information. If they are not, you can ask the Department of Labor to obtain this information.

Divorce, especially one with so much financial workload, can be difficult to navigate. However, with a helpful legal team, you may be able to make the process that much easier for yourself and everyone involved.

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