WHAT IS A QDRO?

• “QDRO” is an acronym for a Qualified Domestic Relations Order. A QDRO is a specific court order that directs division of retirement funds and allocates tax liabilities.

• A QDRO is not a neutral document. As such, a properly drafted QDRO is a powerful tool.

• A QDRO prepared by EZ QDRO LAW is an individualized legal document, not a form or standard boiler-plate document. Using sample QDRO forms can result in lost benefits, overlooked alternate distribution schemes and loss of enhanced protections.

In domestic relations matters, retirement assets are generally divided and assigned via a QDRO, or other similar court order. QDROs allocate marital property rights in divorce, provide for spousal support, and can be used for the recovery of child support.

A QDRO is the legal mechanism used to divide a retirement account that is qualified by a plan in accordance with the Internal Revenue Code and the Employee Retirement Income Security Act (ERISA). However, a QDRO generally refers to any domestic relations order (DRO) that divides a retirement account or other form of deferred compensation, and results in the direct payment from the retirement plan to the non-employee spouse.  

Some plans provide (and strongly suggest the use of) preassembled sample ‘QDRO forms’ designed to reduce the plan's administrative burden and costs. These boiler-plate forms are not designed with your client's best interests, the decree, or your state’s domestic relations laws in mind. 

There are countless types of retirement plans and various ways to divide and distribute assets under each plan. Therefore, every QDRO must be drafted with careful consideration of all surrounding facts and circumstances. Doing so requires an understanding of the nuances of each particular retirement plan. This includes issues such as survivorship rights, disability supplements, early retirement subsidies, delayed employer contributions, non-vested benefits, plan loans, retroactive valuation dates, timing, duration, and form of distributions, or even the distribution of benefits in the event of the non-employee spouse's death. Clients are best served when these complexities are addressed by an attorney who has experience with these issues.