Dividing Retirement Benefits Incident to Divorce
The family law attorneys at Tharrington Smith provide representation in an array of family law matters, including the highly-specialized area of retirement division. Our attorneys are knowledgeable and experienced about dividing IRAs, pension plans, defined contribution plans, and government and military retirement plans incident to divorce and/or to enforce financial obligations.
In order to divide certain retirement accounts between spouses in a divorce, the plan administrator or trustee of the retirement plan requires a special court order that specifies how the plan benefits are to be assigned to each spouse. These special orders are required by Federal law and allow the benefits to be paid directly by the plan to the other spouse.
Pensions and defined contributions plans (such as a 401(k), 403(b), Profit Sharing Plan, Money Purchase Plan, and Tax-Sheltered Annuities) typically require a Qualified Domestic Relations Order signed by a judge to transfer a portion of one spouse’s retirement benefits or account to the other spouse incident to a divorce.A Qualified Domestic Relations Order is commonly referred to as a QDRO (pronounced quad-ro). A QDRO is the type of order required by most retirement plans.
Government and military pensions also require a special court order to divide retirement benefits between spouses. These orders may be referred to by other names such as a “Court Order Acceptable for Processing” (or “COAP”) or a “Military Pension Division Order” (or “MPDO”).
The preparation of a QDRO – or its equivalent – can be very complicated and requires an understanding of state equitable distribution laws as well as relevant Federal laws. The order should be prepared shortly after the parties sign a separation agreement or the court enters its equitable distribution judgment, in order to ensure that the retirement benefits assigned to each spouse are preserved. Perhaps most importantly, the QDRO or other order must accurately and correctly set forth the assets and benefits that each party is to receive. It is very difficult for omitted assets or benefits to be transferred or assigned at a later date, but our lawyers can review your property division and advise you about options if an asset was overlooked or incorrectly divided or if a retirement order never was submitted to the plan.
When your financial future is at stake, you need the most experienced legal representation available to protect your interests. At Tharrington Smith, Jaye Meyer and Jill Jackson are educated and experienced in preparing QDROs and other retirement orders to facilitate the division of retirement benefits and assets between divorcing spouses. Contact us at Tharrington Smith to see how we can be of assistance to you.