When you use a qualified domestic relations order (QDRO), you can split up a retirement account, such as a pension plan. If your spouse is receiving a pension from their employer, there’s a good chance you were counting on this money to retire. You don’t necessarily lose that ability just because you’re getting divorced.
With a QDRO, the court issues an order stating how the pension should be divided once your spouse begins receiving it in the future. They may not retire for years or even decades, but having the order in place in advance guarantees that you will receive some of those payments. But how much do you get?
Considering multiple factors
Do not assume that a QDRO means the retirement account will be split in half or that you would get 50% and your spouse would get the other 50%. In reality, the court is going to look at many different factors, such as how much each of you earn, the length of your marriage and any prenuptial agreements.
Marriage length makes a big difference. For instance, the court may determine that you should get 50% of the pension plan from the time when you and your ex were married, but that could be less than 50% of the total if they also earned part of that pension before or after the marriage. You would not have a right to that portion, as it would be a separate asset. So you may end up with 30% or 35% of the total monthly payment.
Every situation is unique, and the key is just to make sure that you know exactly what legal steps to take when setting up a QDRO.