A qualified domestic relations order, or QDRO, is a specialized court order that may be part of a divorce case. The purpose of a QDRO is to divide a financial retirement account. Even though you have a judgment of divorce, it is also important to have a QDRO to officially divide any retirement accounts without incurring penalties. Here’s why you need a QDRO in New York.
What does a QDRO do in a New York divorce?
Qualified domestic relations orders provide information about dividing a retirement account for the company that administers it. The order details exactly how the parties want to divide the account as part of the judgment of divorce. It provides the specific information needed to give effect to the judgment. With this information, the company can complete the division of the account.
A variety of information may be a part of a QDRO that isn’t in the judgment of divorce. Information that may be needed for a QDRO includes:
- Identification of the administrator of the plan
- Addresses of the parties
- Social Security numbers of the parties
- Name of the primary account holder
- Account numbers
- How the account is to be divided, such as by percentage, months of service credit or a flat dollar amount
- Survivor benefits
Some organizations that administer 401(k) and pension plans have information available to help individuals complete these documents. An individual’s divorce attorney may provide an explanation of the process.
Why is the judgment of divorce important to a QDRO?
Ultimately, a QDRO divides the retirement account according to the terms of the divorce. The judgment of divorce should state the details of how the account is valued and divided between the parties. If the information in the judgment of divorce is incomplete, it can create questions for how to divide the account.
Dividing financial accounts in divorce
When you understand the importance of a QDRO, you can work to ensure that your judgment of divorce is complete. Having accurate financial documents is important to receiving the funds that you deserve in divorce. Your divorce lawyer may assist with the preparation of QDRO documents.