QDRO doesn't have to be a four letter word

My services are designed to help family law practitioners achieve a more equitable and fair division of marital property, while also preventing potential pitfalls and delays related to complex plan documents and changing laws.

In divorce, retirement assets are often the largest consideration for equitable distribution. As such, a properly drafted QDRO can be a very powerful tool. Many QDRO preparation companies use non-attorneys and standard forms or generic document assembly services. However, a knowledgeable attorney's personal review of specific plan documents and QDRO procedures is critical to securing essential rights for your client and avoiding pitfalls. Concentration on a particular plan's QDRO procedures also improves chances of the plan timely qualifying initial submissions. My individual attention to your case includes a thorough review of the applicable plan documents.  I also stay current on the ever-changing world of federal and state law related to retirement plans and division of marital property.

A QDRO is not a neutral document. Therefore, I do not rely on model forms. Plan administrators provide these model forms to ensure efficient processing on their end in order to keep their costs down. However, reliance on model forms can result in forsaking benefits to which your client is entitled and overlooking alternate distribution schemes and enhanced protections.  In drafting settlement agreement language and QDROs, I carefully take into account such matters as non-vested benefits, retroactive valuation dates, cost-of-living adjustments, earnings/losses, early retirement subsidies, plan loans, forfeitures, timing and form of benefits, attorney's fees, continued jurisdiction, personal liability, inadvertent payments, notice of retirement, survivorship rights, and distribution in the event of the non-employee spouse's death. 



Understanding the plan policy and terms in advance of drafting the QDRO secures your client's interests early in negotiations, preventing headaches, and lost time and money. 

For instance -

  • A pension plan may not have survivorship benefits, or may only have limited survivorship benefits, in which case you may need to negotiate differently for your client. Finding this out after the settlement agreement has been entered into means a lost opportunity to negotiate.
  • With a 401k, you need to know if the participant is getting delayed employer contributions, and if so, when and how much. Most plans will pay this delayed contribution in the January or February following the year earned, and these contributions can be thousands of dollars. So if your client is the alternate payee, and divorces in December, he or she could miss out on an entire year of the contributions earned during the marriage if you don't know they exist.
  • Certain 401k plans will not retroactively value accounts or determine market value fluctuations on an award from a date in the past. This can lead to problems that are not anticipated by the parties. Knowing the plan rules prior to preparation of the QDRO can alleviate this type of bad surprise.
  • Pension plan rules for determining the marital portion, duration, timing and form of benefits vary greatly, risking inequitable division of property if you don't learn of the plan rules in advance of negotiations.  
  • Many government pension plans have default rules that can completely nullify certain benefits for your client if not properly addressed in the settlement agreement or order. The default rules can also trigger certain other unintended outcomes that may result in having to go back and renegotiate and redraft. Moreover, there are local government plans that don't allow for division of retirement plan accounts in divorce at all - causing nuisance and delay to go back and renegotiate property rights.
  • Government thrift savings plans, which are similar to 401k plans, likewise have default rules, such as only allowing vested benefits to be divided and automatically including loans in the amount to be divided. This can have a huge effect on the amount awarded to the ex-spouse. Knowing the plan rules in advance can ensure your client is receiving the full amount of benefit to which he or she is entitled.



Price is what you pay for something; value is what you get.
— Benjamin Graham