Do you understand a qualified domestic relations order?
A qualified domestic relation order, also known as a QDRO, is an order created by the court to divide retirement benefits.
If you never go through the divorce process, this is not something you will have to deal with. However, if you find yourself splitting from your spouse, it could very well come to light at some point in the very near future.
If you find yourself dealing with a QDRO, there are several questions you need to answer. These include but are not limited to:
— What does the court take into consideration when dividing retirement benefits?
— Is there anything you can do to ensure that you keep as much of the money as possible?
— Is a QDRO always issued by a state court?
— What type of information is included in a QDRO?
— Are there any ways to work around a QDRO, such as by giving up other assets in the divorce?
— Does a QDRO have to be part of a divorce or property division settlement?
Just because you are going through divorce does not mean you will absolutely be faced with a QDRO. Even so, you want to learn as much about this as possible, such as by answering the questions above as they pertain to your situation. You have the right to live your life in retirement, and you don’t want this to be burdened by a divorce and subsequent qualified domestic relations order. Fortunately, there are ways to deal with this order. Doing so in the appropriate manner will have less impact on your finances.
Source: U.S. Department of Labor, “Frequently Asked Questions Qualified Domestic Relations Orders,” accessed Nov. 27, 2015