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Qualified Domestic Relations Orders in a High Asset Divorce

Posted on in QDROs, Pensions and 401(k)s

TX divorce lawyerOne of the most common points of contention in any divorce is how a couple’s assets will be divided upon dissolution of their marriage. Although most couples understand that this will involve dividing relatively common assets, such as bank accounts, the family home, and vehicles, it’s important to remember that more unusual property, like retirement accounts, will also need to be divided. In most cases, at least some of the contents of a retirement account are considered marital property, which means that they must be divided equitably between the spouses. While this could mean that each spouse receives an equal share of the benefits, this is not always true, as courts are generally guided by what would qualify as equitable distribution when making their decisions.

Whether your retirement account pays out on a regular basis or you can withdraw as you see fit depends in large part on the type of account in question and the contents of your Qualified Domestic Relations Order (QDRO). To learn more about dividing your own retirement account upon divorce, please contact a member of our high asset divorce legal team today.

What Is a Qualified Domestic Relations Order?

QDROs, or Qualified Domestic Relations Orders, are court orders that lay out the ground rules for how a retirement account will be used following a divorce, including how its contents will be divided. These documents are necessary for most types of retirement accounts, including 401(k)s and IRAs and are used to verify a person’s right to receive a portion of the benefits paid out of a retirement account. Basically, this means that QDROs are used to name a former spouse as an alternate payee upon divorce, even if he or she didn’t actually participate in the plan.

The Contents of a QDRO

In most cases, QDROs simply state how the administrator of a plan will distribute the funds in the account, with a focus on a distribution process that is similar to what a couple would have used if they had stayed married. These orders ensure that both parties will receive a fair portion of the account how and when they expect it by requiring the inclusion of certain information, including:

  • The name and contact information of the participant and alternate payee;
  • The name of the plan to which the order applies;
  • The dollar amount or percentage of the benefit that will be paid to the account holder’s former spouse; and
  • The number of payments or the time period to which the QDRO applies.

Finally, a QDRO can clarify how the parties’ future marriages would impact the plan and the payments.

Call a Dedicated Georgetown High Asset Divorce Attorney for Assistance

If you and your spouse have decided to file for divorce and you have questions about how your retirement accounts will be divided upon dissolution of your marriage, please contact one of the skilled Georgetown high asset divorce attorneys at The Law Offices of William D. Powers by calling 512-610-6199 today. A member of our team is standing by to begin working on your case.

 

 

Sources:

https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/qdro-overview

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-qdro-qualified-domestic-relations-order

The Law Offices of William D. Powers

8911 N. Capital of Texas Highway, Building 2, Suite 2105, Austin, TX 78759