QDRO Basics: Do I Need One Following My Florida Divorce?
When persons get divorced and retirement accounts are divided, then it may be necessary to get a qualified domestic relations order (QDRO). A QDRO is a special court order that sets forth the details about how a retirement account such as a 401K is to be divided. In order the for division to be effective, the QDRO must comply with certain legal requirements. For help with obtaining and implementing a QDRO in your Sarasota, Bradenton, or Venice, Florida divorce, please contact Sarasota divorce attorney Matthew Z. Martell for further assistance.
When is a QDRO needed?
If a person’s retirement benefits are divided in a divorce, then a QDRO may be necessary to ensure each party receives their share. Because financial penalties may be imposed by withdrawing funds from a retirement account, a QDRO allows that retirement account to be divided so each party can independently determine how to handle their share of the account. For example, if a QDRO divides a 401K account and one spouse wishes to withdraw his or her funds, then he or she may do so without the other spouse receiving financial penalties. Each spouse may also maintain the funds in that retirement account instead. Additionally, each spouse may independently determine his or her own beneficiaries for that retirement account after the QDRO has been fully implemented.
What must be included in QDRO?
In order for a QDRO to be legal and enforceable, it must comply with certain legal requirements. The specific retirement plan provider may also have certain language and details that must be included in your QDRO. To ensure that a QDRO is done correctly and to avoid any issues or problems arising in the future, you should work with Sarasota divorce attorneys who have experience with handling QDROS. Since this is a highly specialized area of the law, normally most Sarasota divorce attorneys hire an attorney who specializes only in doing QDROS to draft, submit, and implement your QDRO. There are only a handful of attorneys who do QDROS in Florida and most do it for a flat fee. In general, a QDRO must specify the date the account is to be divided, the identifying information for each party, the account details, and evidence the dissolution of the marriage.
How does the QDRO process work?
Normally, you need to wait until the Final Judgment of Dissolution of Marriage has been entered in your divorce. Then, the QDRO(s) are submitted to the Judge to be executed and filed. Next, the QDRO attorney obtains certified copies of the QDRO(s) and the Final Judgment of Dissolution of Marriage and then submit them to the retirement plan administrator(s) for approval. Once they are approved, the retirement plan administrator will implement them. After they are implemented, the funds are divided and disbursed to the ex-spouses. Typically, these funds are put into another new or existing 401K or IRA for the spouse receiving the disbursement. This whole process can take several months up to over a year to complete because it is highly bureaucratic when it comes to dealing with retirement plan administrators.
Don’t try to go it alone when it comes to QDROs.
The QDRO process is complicated and highly bureaucratic. If you try to get one implemented on your own, you are going to end up spending a lot of time frustrated and banging your head up against the wall. It is best to leave this difficult task to a divorce attorney who utilizes and has an existing business relationship with a QDRO attorney(s) to get this difficult part of your divorce completed. If you are going through a divorce in Sarasota, Bradenton, Lakewood Ranch, or Venice, Florida and need assistance with obtaining and implementing a QDRO, then please contact the Law Offices of Matthew Z. Martel, P.A. located in Sarasota and Lakewood Ranch, Florida at (941) 556-7020 to learn how we can assist you.