Some call them Quatros. Others call them Kudros. The term “QDRO,” which is an acronym, stands for “Qualified Domestic Relations Order.” Unless you have gone through a divorce and had a qualified retirement plan, you probably have never heard of this term
A QDRO is an order issued in a divorce proceeding for a retirement plan to pay a spouse or former spouse his or her community property rights in a retirement plan. A QDRO can also order the plan to pay child support and/or alimony to a spouse, former spouse, child or other dependent of the plan participant.
QDRO’s are relatively simple documents, but they can be tricky to prepare. For this reason, many family law attorneys refuse to prepare QDRO’s and often farm the task out to other attorneys, like Pecos Law Group, who are familiar with the nuances of pension plans. While farming out QDRO preparation is acceptable and may reduce legal fees, many family lawyers fail to address significant retirement issues in the divorce settlement or at trial.
Issues such as survivor spouse benefits, tax basis, loans against the account, and allocation of post-divorce gains and losses, should all be addressed in the Decree of Divorce and resolved before a case is sent to another attorney for drafting a Qualified Domestic Relations Order.
The Pecos Law Group is a full-service family law firm, meaning we can handle any family law issue including the preparation of QDRO. If your divorce case is over and you have yet to divide you or your spouse’s pension or 401(k) account, we can help you.
A QDRO Without Getting Divorced?
Pecos Law Group is offering a relatively new legal service that may be of interest to some individuals who want more flexibility with their retirement funds, but are not divorcing.
Because of the early withdrawal penalty, retirement funds can, at times, become trapped in an under-performing 401(k). In such cases, an intra-marriage qualified domestic relations order can be used to remove the funds from the 401(k) into an IRA in the other spouse’s name. The strategic use of an intra-marriage QDRO can loosen funds from a 401(k) without a divorce and provide married couples more freedom in their financial planning. While the concept is not yet well established in Clark County, Pecos Law Group recently had a couple of judges sign the order allowing this.