Any marriage could potentially end in a messy divorce. However, some couples are at greater risk of protracted divorce conflicts than others. Those who have enjoyed a more comfortable standard of living during the marriage and who have more shared wealth might be at elevated risk of a contentious divorce.
Those with clear prenuptial agreements, on the other hand, may have less reason to fear divorce conflict. They have already established guidelines for the division of their property and the allocation of financial support in the event of a divorce. Prenuptial agreements can limit how much spouses fight over their shared assets. If spouses signed a prenuptial agreement prior to legally marrying, they may approach divorce with the assumption that they don’t have to worry about many of the traditional complications inherent in the process.
Does divorcing with a prenuptial agreement on record eliminate the need for a qualified domestic relations order (QDRO)?
Needs depend on the terms of the agreement
Just as every marriage is unique, so too is every marital agreement between spouses. If the prenuptial agreement specifically includes provisions for the retirement accounts owned by the spouses, then the spouses may not need a QDRO to divide their retirement savings. The necessity of a QDRO depends on whether the prenuptial agreement addresses retirement accounts and what terms it imposes.
Sometimes, the expectations outlined in a prenuptial agreement specifically designate retirement accounts as separate property. If spouses agreed that they would not share retirement savings in the event of a divorce, then they may not need to draft a QDRO because of the terms included in the prenuptial agreement.
However, if the prenuptial agreement simply describes the way in which spouses should divide the marital estate, then it may still be necessary to draft a QDRO. Anytime spouses intend to split a 401(k) or similar tax-deferred retirement account, they need to use the right documents. Otherwise, there could be tax consequences and financial penalties that diminish the value of those resources.
Having a QDRO drafted and properly recorded can help spouses preserve their retirement resources after they divorce. People who understand the need for QDROs and the role that these documents serve can determine what support they require as they prepare for divorce.