Getting a divorce is a difficult process on both an emotional and a practical level. There are so many things to consider that it can often happen that some detail gets overlooked. Financial assets are of primary importance, and the division of your assets will affect your future for the long-term.
If you are getting a divorce or are already divorced and you need to understand what happens to your pension, here is some information that you can use to learn more about how to proceed.
Dividing pensions in divorce
Pensions are transferred either during the divorce process or after through an order called a QDRO - a Qualified Domestic Relation Order. This is what you need to prepare in order to divide your pension after divorce. A QDRO is a court order for a retirement plan to pay child support, alimony or marital property rights. The preparer must include specific information in a QDRO. Also, because the order deals with a retirement plan, you must consider tax issues as well.
Risks to be aware of
If your retirement plan is going to be the source of payments to your former spouse, it is in your best interest to inform yourself about the ways you can strategically work to avoid having many extras included in the QDRO. Having the order prepared correctly is also important. If the order is unclear about conditions regarding how to divide the pension, revisions and new drafts can cost you extra time and money.
Can attorneys help me with a QDRO?
When you have initial consultations with a divorce attorney, ensure that the attorney handles QDRO preparation. Some lawyers do not include QDRO services in their retainers. This could ultimately be an issue if you find you need to divide your pension but your lawyer is unable to assist you.
If you are already divorced and now need to have a QDRO prepared, the best way to proceed is to specifically seek out this type of attorney. Ensuring you hire a qualified professional will save you headaches in the long run and help you to devise the most effective plan for your needs.