- What Retirement Plans Require a QDRO?
Most retirement plans legally require a QDRO before the plan's assets can be distributed to a former spouse. They include:
- 401(k) plans
- 403(b) plans
- 457 plans
- Stock ownership plans
- Profit-sharing arrangements
- Defined benefit/pension plans
- Certain annuities
2. What is a Qualified Domestic Relations Order (“QDRO”)?
A QDRO is a specially designed court order that is required for the division of retirement benefits in a Georgia family law case. The way retirement assets are split is through the QDRO mechanism. This would affect, among other retirement accounts, a 401(k) and retirement plans.
3. Why do I need an Annual Benefit Statement for a QDRO?
An Annual Benefit Statement is needed so you know exactly how much money is in the account, or how much benefit is accrued, or what's the salary and the formulas in order to create the amount that's going to be determined, as far as what that defined benefit is in the future. In short, the Annual Benefit Statement will give you an outline of the account and how much money is involved
4. Are Retirement Assets Joint Property?
In the state of Georgia, retirement accounts are considered marital property if those assets were accumulated during the marriage. Regardless of who earned more or who contributed through paycheck deductions, Georgia law sees one pot of money to be divided equally. However, if one spouse had a pension or 401(k) prior to marriage, the premarital portion is considered separate property.
5. Is a QDRO a complicated document?
Preparation of a QDRO can be time-consuming and complicated. The content requirements of a QDRO will vary from retirement program to retirement program. Usually, the Qualified Domestic Relations Order must be specifically drafted to include certain language and requirements provided by the retirement program, then submitted to the company for approval before obtaining necessary signatures from the parties and the Court. If the document lacks any specific required language, it will often be rejected.
6. When both spouses have nearly equal retirement benefits, does that change anything for the QDRO?
Two spouses who work is a common situation. So if both spouses have been working and earning retirement benefits throughout the course of the marriage, a QDRO might not be necessary since property can potentially be divided in such a way that both spouses keep their own retirement benefits and do not receive funds from the other's accounts. That can be negotiated. When spouses have similar financial profiles, it can be a "you keep yours, I'll keep mine" scenario.
And even if one spouse was a stay-at-home parent during the marriage and did not earn any retirement benefits (or simply earned less than the other spouse), it may be possible to reach a property settlement that keeps the employee spouse's retirement accounts intact but provides the other spouse with assets that account for his or her portion of the current benefits and the amount that they are likely to accrue in interest in the future.
We are local QDRO lawyers and when you have any QDRO questions, please call us at 678-215-4106.