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Is a QDRO Necessary in a Divorce?

Thursday, July 06, 2017
Is a QDRO Necessary in a Divorce?

When it comes to divorce, there are a lot of assets that need to be addressed and often split. However, we tend to focus on the immediate assets, like what is in our bank accounts. Yet, so much more important are the ones we won't need until much later in life - the retirement accounts. These can be tricky to split and even trickier to make sure that everyone can withdrawal their set amount when it is time.

A Qualified Domestic Relations Order, or QDROis put in place to set an alternate payee non-employee spouse. A QDRO basically designates who can receive funds from that other's retirement account and can prevent early withdrawal fees. Basically, a QDRO will instruct a plan administration of how to pay the nonemployee's share of the retirement.

While a QDRO is typically used for married couples, don't be confused by the nomenclature, "non-employee spouse" can just as easily be changed to "alternate payee" after a divorce. In fact, even if you aren't planning on divorce, you should still have a QDRO in place since it can make the division of assets in the event of a divorce so much easier.

What a QDRO does and why it can be so necessary is that it tells the plan administrator that the alternate payee can withdraw a certain amount, but only so much. This means if you divide up the retirement accounts, it can basically section a portion of it off in the event of your divorce settlement.

If you are considering divorce and need experienced and knowledgeable representation, contact us today. The Law Offices of Elena Mebtahi are dedicated to getting you the results that you desire.


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