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A Qualified Domestic Relations Order (QDRO) is a court order that is used to divide defined benefit retirement accounts during the process of divorce. A QDRO allows the former spouse, also known as the alternate payee, to receive a portion of their spouse’s pension plan to the extent that these benefits were accumulated throughout the duration of the marriage. The spouse who earned these benefits is known as the participant.
How it Works
For a QDRO to be enforceable and implemented by the pension plan, it must be issued by a court through an order or decree. Public or government retirement plans are not subject to the same rules, though they are often divided similarly. If you have retirement assets that need to be divided, the process of procuring a valid QDRO typically takes anywhere from 2 to 4 months, starting from the moment the order is drafted. Depending on the details of your case, this process can potentially take more or less time.
In the state of New York, pensions are divided according to the case of Majauskas v. Majauskas, which set forth the formula used to determine the marital share of pension plans in divorce cases. This formula sets forth a fraction, the numerator of which would be the number of months the participant was enrolled in the pension plan from the date of the marriage to the date of commencement of the divorce or date of separation. The denominator would be the number of months the participant has been enrolled in the pension plan from the date of commencement to the date of retirement, (actual date or anticipated date) termination or death.
For example, H and W have been married for 15 years or 180 months, all of which H was a participant in a pension plan. H has been employed at his company for 20 years and he will retire in 10 years, for a total of 360 months. He will collect $500 per month an retirement. The fraction as set out above would be 180/360 or .5. W’s share of H’s pension would be 50% of .5 of the monthly benefit of $125.00 per month. ($500 x .5 = $250 x 50% = $125)
A QDRO should be prepared by an expert who is knowledgeable in property division and valuation. These matters are incredibly complex and, as such, require the attention of someone who understands the intricacies and rules of this process. QDROs must be specific in their language, so if anything is left out or unclear, it could compromise its validity. For example, the percentage or amount of benefits paid to the alternate payee, a formula that calculates how the amount will be determined, and the number of payments the alternate payee will receive are a few of the details that will need to be included in a QDRO.
Although a plan administrator can provide the QDRO forms that you and your soon-to-be former spouse will fill out on your own, you should speak with an attorney to ensure the QDRO you draft addresses the specific needs of your situation. Otherwise, you risk it being invalid or it simply might not meet your needs. Legal matters are generally never something you should attempt to handle on your own, especially when they are particularly this complex.
Contact an Experienced Property Division Attorney Today!
If you are going through a divorce, your marital assets and property will be divided, including your retirement benefits. You will need a QDRO to properly divide these assets. At The Law Office of Keith M. Casella, P.C., our property division attorney will walk you through this complex process to ensure your retirement benefits are appropriately divided, without incurring any needless fees. With over 2 decades of legal experience, you can feel confident in our team’s ability to get you through every step of the way, so you can embark on this new chapter in life with a clean slate.
Contact our law office today at (718) 557-9137 to schedule an initial case review with our knowledgeable property division attorney.