A qualified domestic relations order is a court order used to divide or transfer certain types of retirement plans. The spouse whose name is on the account is known as the participant, and the spouse who will receive part or all of the proceeds in the account is known as the alternate payee. A QDRO is sent to the retirement plan administrator upon the finalization of the divorce to give part or all of the proceeds from the participant’s account to the alternate payee. A QDRO can order the administrator to make the transfer of funds while the participant is still alive or award survivorship benefits to the alternate payee for when the participant dies.
A QDRO is not required for all types of retirement plans, but it is necessary for all types of retirement accounts that fall under federal ERISA laws. This includes all defined benefit and defined contribution plans, such as 401(k)s, 403(b)s, employee stock ownership plans, thrift plans, deferred compensation plans, and traditional pension plans. A qualified domestic relations order is not required for individual retirement accounts (IRAs), military pensions, and other types of retirement plans that do not fall under ERISA.
Failing to file a QDRO can be devastating to a person’s final divorce settlement in Washington. Typically, a qualified domestic relations order should be filed by the court as soon as the divorce is finalized with the retirement plan administrator to enact. While it is possible to file a QDRO after a divorce is finalized, the process can be time consuming and expensive. In many cases, the spouse seeking the QDRO must reopen their divorce case with the court if it was not filed with the initial settlement. If the plan participant retires before the qualified domestic relations order is filed, it can create other issues because the participant will start receiving their benefits from the plan. If the plan participant dies before the QDRO is issued after a divorce, the former spouse seeking benefits may not receive anything from those accounts.
An experienced Washington divorce attorney knows when a QDRO is required to access certain retirement benefits in a divorce and can help you navigate this difficult process. To learn more, call or contact the Hodgson Law Office in Spokane today.