Sunday, Sep 25, 2016
Can I Get a QDRO After My Divorce Has Been Entered?
When it comes to dividing the marital assets during a divorce, one of the most complex issues is the question of dividing retirement benefits. This is especially important for couples who have not yet reached retirement. To access the assets in a retirement account, a special order called a “Qualified Domestic Relations Order” (QDRO) is used.
A QDRO involves using certain federal statutes to allow the parties to a divorce to access and divide up retirement funds. The goal is to do so without incurring the early withdrawal and taxation issues that would normally arise from doing so. An exploration of how this works is beyond the scope of this post. Suffice to say, obtaining a QDRO is a highly complex process that requires extensive knowledge of federal and state statutes.
When Should You Get a QDRO?
The question of when you should finalize a QDRO—specifically, whether it is possible to get a QDRO after a decree has been entered—is best answered: it may be possible, but it is not ever advisable. Some people feel that it borders on malpractice for an attorney to wait until after the decree has been entered in order to obtain a QDRO.
A QDRO Divides an Interest in a Retirement Plan
Here’s how this works. A QDRO will direct the administrator of your spouse’s retirement plan to give up the benefits that are payable to a plan participant. That is you; you have surviving spouse benefits. However, if you get divorced and your spouse remarries, then his or her new spouse receives those surviving spouse benefits. In this circumstance, you will no longer be a plan participant according to how these plans are set up.
This means that the QDRO—even if it existed—would be directing the retirement plan to pay your share to you. However, your share would be nothing, because you would no longer be a plan participant.
So What Should You Do?
Sometimes there are strategic reasons to wait until the divorce becomes finalized to have the QDRO entered; this does not mean, however, that you should take the risk of your spouse remarrying in the meantime. What you can do is talk with your lawyer. You can then ask about presenting the divorce decree and the QDRO at the same time for the judge’s signature. So, the judge would sign one and then sign the other immediately thereafter.