If you and your spouse choose to divorce after being married for a significant number of years and either of you has built up a sizable pension, the pension may face a complicated process of division when it comes time to negotiate a divorce settlement. Dividing pensions and other kinds of retirement accounts is more complicated than “he gets half, she gets half,” but we are not going to discuss the method of division here at this time. Instead, we will examine one of the tools used in the process — the Qualified Domestic Relations Order (QDRO).
In broad strokes, the QDRO is an order that a court uses to recognize one party’s right to receive all or a portion of payable benefits. This party is known as the alternate payee. The QDRO may also be used to bestow an alternate payee that right.
The QDRO works in conjunction with the property division laws of the state where you are getting your divorce. These laws may vary greatly, and may affect how you choose to pursue divorce. Whereas New York is an “equitable division” state, several other states, including California and Texas are community property states, and use different methods of property division.
The State of New York does not recognize domestic relations orders regarding retirement plans unless they are properly executed QDRO’s, so it is very important to pay attention to the details when preparing a property division agreement.
If you are in a property division dispute, it is always wise to pursue the guidance of an experienced attorney, especially when it comes to dividing complex assets such as retirement accounts or pensions. With proper guidance from an experienced attorney, you can ensure that your property division abides by all the necessary laws while keeping your rights protected.
Source: United States Department of Labor, “QDRO’s – An Overview FAQs,” accessed May 26, 2017