QDRO Frequently Asked Questions
At SD Esquire, we receive many questions regarding QDROs. Below are answers to FAQs we receive.
What is a QDRO?
QDRO stands for qualified domestic relations order. ODROs are required to divide certain retirement plans during a divorce proceeding.
Do I need a QDRO?
QDROs are required by federal law to divide certain types of employee sponsored retirement plans. QDROs are required for 401(k), 403(b), 457, thrift, profit sharing, money purchase, employee stock ownership, and other business plans. Government pension plans do not require a QDRO. You will need a QDRO if you are receiving a percentage or a fixed amount of the payments once your ex begins withdrawing from the plan. You do not need a QDRO if your spouse is buying you out of the plan.
My divorce settlement says I get 1/3 of my ex’s 401(k) once he/she begins withdrawing from it. Is that enough?
No. You will need a QDRO in addition to the divorce settlement.
Do I need to get an attorney to draft a QDRO or can I do it myself?
QDROs are complicated legal documents and the laws governing them are complex. QDROs must be tailored to the specific plan. It is easy to make costly mistakes if you try and draft a QDRO yourself. If you need a QDRO, contact an attorney that specializes in QDROs.
I need to divide a government pension plan. How do I do that?
You will need a Domestic Relations Order (DRO), which is similar to a QDRO, but governed by different laws. If you need a DRO, speak with an attorney who specializes in retirements or DROs.
How long does the QDRO process take?
Once an attorney drafts a QDRO, he/she will submit it to the plan administrator. The plan administrator will accept it or request that changes be made to it. If the plan administrator rejects the QDRO, your attorney will need to make changes to it and refile. Once the plan administrator accepts the QDRO, you and your ex-spouse must sign it. If your ex is uncooperative, you may need to get a court order. Then the QDRO needs to be submitted to a family court judge. Once the family court judge approves the QDRO, it needs to be submitted to the plan administrator again for final acceptance. This process takes 3-6 months.
Would it be better to take a lump sum now instead of getting payments over time?
Everybody’s situation is different, so talk with a financial advisor. There can be major tax consequences to dividing a retirement plan, and a financial advisor can help guide you to the best way to divide your retirement plan.
Is there a deadline for filing a QDRO?
There is no hard deadline for filing, but it is in your best interest to file as early as possible. You cannot receive payments until the QDRO is accepted and you cannot get retroactive payments, even if you would have gotten payments had the QDRO been filed earlier.
California QDRO Service
Sign up online for our QDRO service. Upon submitting an order, you will be emailed an intake questionnaire. You will provide information to us including your contact information, copies of your divorce judgment (including the marital settlement agreement), and your retirement plan information. Our QDRO attorney will follow-up with you if additional information is required.
Once we obtain all the necessary information, we will prepare the draft QDRO. The draft will be sent to both parties for review. If needed, the draft order will also be sent to the retirement plan administrator for pre-approval. When no further revisions are needed, San Diego Esquire will provide you with the final QDRO to file with the court and instructions on how to submit it to the plan administrator.
Contact us if you have any questions about our services.