While most people know certain family law terms like “community property” and “visitation“, even if they haven’t been involved in a divorce, they generally haven’t heard the acronym “QDRO” before. It is, though, quite common.
A Qualified Domestic Relations Order or QDRO is a legal tool used to divide retirement accounts. Specifically, it is a court order signed by a judge, which directs the plan administrator of the husband’s or wife’s pension or 401(k) to distribute a portion of those funds to the other spouse. The transfer is accomplished without implicating any penalty or tax payment requirement.
If either spouse accumulated retirement benefits during the marriage, those benefits will be considered marital property (unless a valid prenuptial agreement indicates otherwise). Generally, unpaid retirement benefits accrued before the date of marriage will be considered non-marital or separate property. Non-marital property will not be divided in a divorce.
Likewise, social security benefits, federal railroad retirement benefits, and some government pensions are not considered distributable in a divorce action.
No QDRO is needed if the retirement savings are deposited in Individual Retirement Accounts (“IRAs”). If the parties’ retirement savings is held in a traditional pension (or “defined benefit plan”), a Employee Stock Option Plan (ESOP) or a 401(k) plan (or “defined contribution plan”), the law and the plan administrator will require a QDRO to accomplish the division of funds.
Due to federal regulation of pensions and 401(k)s, there are detailed requirements with which every QDRO must comply to be valid. With the assistance of a valid, approved QDRO, all or a portion of the retirement funds in a pension plan or 401(k) plan can be transferred from the plan participant spouse to the other spouse (now known as the “alternate payee”).
The receiving spouse will actually end up with his or her own separate account. If the participant spouse has a traditional pension, the plan administrator will establish a separate pension benefit for the receiving spouse. If the participant spouse has his or her retirement savings in a 401(k) plan, a portion of the plan funds will be rolled over into the receiving spouse’s IRA, with no tax and no penalty.
Many attorneys outsource the drafting of the QDRO because of the tedious requirements of federal law and of the various plan administrators. Before the judge signs the QDRO, the plan administrator will actually need to approve the language of the Order to ensure that it meets all of the plan’s requirements. If the QDRO doesn’t comply with certain laws, the participant spouse (the one who originally saved the money from his or her income) could be stuck with a tax liability on funds he or she transferred to an ex-spouse.
I am a retired police officer in suffolk county new york. I retired on an accidental disability pension in 2006. I divorced in 1997 and a domestic relations order is on file with new york state retirement system. I have tried to ammend this DRO to reflect my current situation as I know in new york compensation for pain, suffering and economic loss is seperate property. This dro is silent on accidental disability as at the time of divorce, I was not injured nor was I aware that I would some day retire this way. I believe my ex-spouse is receiving a portion of my pension that she is not entitled too. I do not know how to correct this as new york state requires an ammended dro. I can not accomplish this here in suffolk county. I need help dealing with the retirement system, i want to protect my rights and what is legally seperate accoding to new york state law. Do you have any suggestions? Please help
Can someone reply to my previous emal
My husband has remarried for the second time. I have a QDRO as part of our divorce settlement. How does that affect my retirement? Does he still get a portion of it? How do I calculate how much he will get if any?
Hi Christine B. Curious how this worked out? My ex-spouse remarried. I have not remarried. I have not completed my QDRO since the divorce was done in 2010. Can I still get his pension & can he still get my pension?
Hi Christine B. and Delray Family, First let me tell you both that I am not an attorney. However your marital facts mirror my own, and I can address some of your questions. My facts…..I divorced my wife in Nov 2012. I had my own 401, she had the same, plus a 403B. Her attorney completed the QDRO for my 401, but I did not follow through with getting my attorney to complete a QDRO for my ex’s 401 and 403.b. Four years past, and she remarried. That jogged my memory, and I called my attorney of record who represented me during the divorce. He was paid in full to represent me, and complete all orders of the court. I was nervous that time and other matters, such as my ex’s re-marriage, might void or decrease my rights to the court ordered QDRO. But I learned that unless my wife quit, got fired or retired, then the money was still within the fund. But remember if your ex quits, retires or the like, then most plans allow disbursements set there after. and if parts of your monies are paid out to her then I’d have to go after her for those funds. But as with most all QDRO’s, it’s paid out in monthly disbursements. Meaning, most monies are still held by the fund. Simply get your attorney of record, or a new attorney to draw up the QDRO. Re-marriage does not affect your court ordered QDRO. But do check with the state. Different requirements for different states! BUT WHATEVER YOU DO, DON’T JUST FORGET ABOUT IT. MOST RETIREMENT PLANS 401-403.B’S AND SUCH, HAVE AVG’S OF $125,000 – $250,000 IN THEM. LOT OF MONEY TO SAY NO TO !!!
i was divorced in 1995, and am still working. i dont believe there is a QDRO on file. is that up to my ex wife to file, and is there a deadline for her to file
I seperated from my wife at the end of 2008 and she had a 401k through work…the divorce is now final and no money was put into that 401 k after we seperated…at the time of seperation it had about 60 grand in it..it now has over 80 grand..am i entiteled to half of the 60 when we seperated?..or half of the 80 since it appreciated and no more money was put into it…THANKS!
Dear Rick M. – it will depend on the exact terms of the QDRO. Some QDROs grant to the alternate payee (which would be you with respect to your ex-wife retirement accounts) a share of the earnings and losses from the benefit calculation date (for example, the separation date) though the date of distribution or division into two accounts. I hope this helps. Best of luck to you. Disclaimer – this response is not meant to constitute legal advice and does not establish an attorney-client relationship.
my ex-husband died before age of retirement does that mean his widow and not me can get money for his florida retirement. I was given half in our divorce papers and I was told that because he never recieved any himself that I am not eligable even if I file my QDRO to get any of my share. Is this true?
I was awarded 1/2 of my exhusband military retirement. He now has over 20 years. How do I file to receive this? Can I file to get a medical and/or financial hardship to obtain my portion? I am in dire straits…
I am to receive 1/2 of his 401K through QDRO as soon as our divorce is final. My question is #1 I heard it’s a 10% penalty on any amount that I don’t roll over? Is this the only penalty I will be subject too or will I also have to pay income tax on any amount that I don’t roll over into another retirement account. Thanks
My divorce was final in 1995 but the matter of our defined benefit plan was never resolved and a QDRO was never done. Do I still have rights to my portion of the pension plan as it was originally outlined?
I divorced in 1987. My husband had a state retirement pension thru. The school district. I don’t believe my attorney allowed for any portion of this pension to be dispersed to me upon his retirement. Can I still claim a portion of this pension?
have been married for over forty years to a man who is now retired from the railroad. I thus also receive railroad retirement. I was told that a legal separation would be the best way to go rather than a divorce. Is it true that a legal separation does not alter my Tier 1 and Tier 2 amounts nor survivor benifits? Neither one of us want to remarry. I would like to see something in writing to confirm this but have not found it in my research. .Also he gave me money from his 401 to pay me my share of our home since he did not want to move or sell it. I added some savings and purchased a home. Do I owe him anything? My attorney says no.
My ex wife’s attorney is doing the quadro calculations based off my entire balance. It’s my understanding that it is suppose to be off our Separation Date. Which is correct
How will I get notified that a QDRO has been placed on me.
Dear Juan – the Plan Administrator most likely will be sending you a notification of receipt of a QDRO affecting your retirement benefits. I hope this helps. Best of luck to you. Disclaimer – this response is not meant to constitute legal advice and does not establish an attorney-client relationship.
can i claim exclusion from ny state tax on pension distribution I get from my ex husband due to a qdro?
my divorce was final in 2004, it is now 2013 myex wifes attorny neverfiled a QDRO she says that he is going to do it now is this possible?
Dear Michael – It is possible to file a QDRO at any time, with the exception (in some cases) of the death of the participant in the plan. Some Plan Administrators will not allow you to file a QDRO after the participant has passed away. Disclaimer – this response is not meant to constitute legal advice and does not establish an attorney-client relationship.
A New York State QDRO was issued at divorce proceedings. Both parties were to share retirement benefits with one another. I signed and filed my portion of the QDRO. My spouse recently retired, but I do not know if he signed and filed his portion of the QDRO.
How do I find out if he has filed the QDRO? Where do I begin?
Dear Peggy – you can call the Plan Administrator of your ex’s retirement plan. Most likely they will be able to tell you at least whether there was a QDRO filed. You can also check in the court where your divorce was granted to see if the judge entered the QDRO. Your ex may have filed it in court but may have not submitted it to the Plan Administrator yet. If the Plan Administrator does not know he is divorced, your ex may be receiving the benefits that belong to you per the Divorce Decree. Disclaimer – this response is not meant to constitute legal advice and does not establish an attorney-client relationship.
My pension plan offered a lump sum payement. My ex wife lawyer submitted a QDRO to divide the money. The pension plan denied the lump sum paymwnt because of the QDRO and I have to wait until retirement and take monthly payement.
Is there any legal action I can take to have the pension plan disburse the lump sum payment 50-50 between My Ex wifwe and mysel?
Dear Jay H. — you may be able to file new QDRO with the plan, changing the terms of the old QDRO. It sounds like your ex-wife filed a QDRO that was prepared as what is known as “a shared interest QDRO.” I hope this helps. Best of luck to you.
My pension plan offered a lump sum payment. My ex wife lawyer submitted a QDRO to divide the money. The pension plan denied the lump sum payment because of the QDRO and I have to wait until retirement and take monthly payment.
Is there any legal action I can take to have the pension plan disburse the lump sum payment 50-50 between My Ex wife and mysel?
My divorce finalized first quarter 2013 Maricopa AZ. It was agree to split retirement accounts equally “must be done within 45 days ” and because I’m set to loose a substantial, and we are way beyond the 45 days , am I still leagally obligated to agree to split our retirment accounts if quadro attorney not retained to split accounts ?
Any help would be great
Dear Total Loss – If the division of retirement benefits and accounts was mandated in the Divorce Decree (your final judgement of divorce signed by the divorce judge) then that obligation will not go away until you and your former spouse agree to modify the Divorce Decree to cancel that obligation. What most likely will happen if you do not do it now, is that you will have to do it later at the time you want to withdraw your retirement account or start receiving pension benefits. The retirement plan administrator, knowing that you are divorce, will ask for the Divorce Decree before letting you withdraw any portion of your retirement benefits. Once the plan administrator sees that in the Divorce Decree your benefits were divided with you former spouse, they will not let you take your money until a QDRO is submitted and approved. I hope this helps. Best of luck to you.
QDRO Law Center – thanks for contributing your expertise to the discussion. I encourage you and all experts to include a link to your website in your profile so people can click on your name if they want to find out how to contact you, hire you or work with you. Also consider adding a photo so your answers stand out. Again thank you for your input – it is invaluable to the community.
Your profile is managed at http://disqus.com/. Log in there to edit it.
I just got divorced and all our monies are in stocks, IRAs, 401Ks etc…., we had no cash. I was awarded a lump sum of cash and it’s in a IRA or 401K. The QDRO has been done. I have no money, job(yet), and have to live on that, buy a home, pay car off, and more. How can I get all of my money without paying a penalty? What’s the penalty % and how much in taxes?
I just recently heard the term and I was unfamiliar. My sister is going through a divorce and someone in my family just mentioned it. This seems like a good thing for her to look into. Thanks for explaining the phrase. http://www.skyprolegal.com/QDRO/
I’m concerned about the penalties for having my portion of me x-husbands retirement transferred to me through QDRO. I am going to need to use a good portion of that for necessities. How much will I lose and is there any way to avoid such penalties
My qdro was approved by the pension plan but the judge denied it.. Am i still eligible
My divorce was final Sept. 2014. A QDRO was drawn up in Nov. 2014 for former husband’s ESOP account. I was awarded a dollar amount in the MSA for a portion of the retirement. The dollar amount was converted into shares of stock equaling said dollar amount. This is a stock option account and is subject to gains and losses. Now that I am a stockholder, and have the same eligibility to gains and losses as former husband, my “dollar amount” that I was awarded can and did change. Now that the stock amount has gone up, former husband is taking me back to court stating that I have received more than I was suppose to. It is now 6 months later, all prior documents showing the transfer was sent to him and his attorney and now that gains have occurred, now they are requesting gains back. The QDRO clearly states that due to the nature of this ESOP account and the way the dollar amount was converted into shares of stock, that I, the alternate payee, is subject to all gains and losses. My question is…if there would have been a loss in stock price, and a decrease in what my account is worth, would they want to fix that?! I think not! And would I be able to take him back to court for more money if I lost money…I highly doubt it. Please give me your thoughts. Thank you.
Though I have heard the terms “visitation” and “community property” when it comes to divorce, I have never heard of QDRO before. I had no idea that there needed to be a specific tool used when splitting retirements. Is it something that lawyers handle or does the judge handle it? http://www.skyprolegal.com/QDRO/
My attorney filed qdro at same time he filed divorce .It was final march 23,2015 .I still haven’t received any paper work nothing .Is this normal procedure
I was awarded half of employee state retirement and some how my ex transferred the retirement funds to teacher retirement system and now because the QDRO states employee retirement system i am having trouble getting my share. Is there anything i can do to get my share.
Just got divorced on September 6, 2016. I had a qdro done and sent to his plan administrator by my attorney. I am to receive 50% of his 401k. It has been a little over a month and haven’t received the first letter. Should I call his plan administrator or give it more time? Also what exactly are the steps after administrator receives qdro signed by the judge?
My ex wife filed the quadro with divorce decree with amount stated in the divorce decree. The amount that was transferred to my ex wife is more than what was stated in the divorce decree. I was not notified by my 401K until i saw it on my statement. My 401K folks are not able to say much as to why the amount taken was way more. Is this possible that they can take out more than whats stated in my divorxe decree. Please advice. Thank u