As you prepare for the divorce process, it’s natural to have concerns about what will happen to your retirement benefits. While there are many ways to tackle this, a qualified domestic relations order (QDRO) may be your best option.

A QDRO is most commonly used for 401(k) and 403(b) plans. So, if you have one or both of these and you’re preparing for divorce, it’s important to learn as much as you can about QDROs and the impact it will have on your future.

In short, a QDRO is a court order issued to divide assets in a retirement plan. While it may seem that it’s the right approach for a couple in your situation, you need to know the steps associated with getting a QDRO before you decide what’s to come. Here are some things to keep in mind:

  • Identify retirement plans: As the divorce process kicks off, it’s critical to outline all the assets that could come into play. And for many divorcing couples, retirement plans are among the most valuable.
  • Work through the process: It doesn’t matter if you’re working through your divorce in litigation or mediation, you’ll eventually come face to face with the question of what will happen to the retirement plans. If either individual is to receive part of the other person’s retirement account, the court will issue a QDRO.
  • Wait for acceptance: Just because a QDRO is issued doesn’t mean the process is over. The QDRO is submitted to the retirement plan administrator for review. From there, the appropriate parties will receive a letter of acceptance or denial.
  • QDRO after divorce is possible: Even though a QDRO is possible post-divorce, it’s better to make it part of the process. If you wait, you’re taking a risk, as your ex could use the retirement assets to their benefit, as they’re not required by the court to include you in any decisions.

You have a lot to think about as you move through your divorce. Retirement assets should always be top priority, as you want to protect your future.

Depending on the way things unfold, you may find that a QDRO is the best way to divide retirement assets. Understanding the process and how to protect your legal rights is a must.