What is a QDRO?
QDRO stands for Qualified Domestic Relations Order, and is used as a generic term for Court Orders to transfer or divide retirement plans pursuant to divorce or legal separation, whether they are Defined Contribution Plans (eg 401(k), 457, 403(b), Thrift Savings Plan, TIAA-CREF), or Defined Benefit Plans (eg FERS, CSRS, Military Pension (COAP), Corporate Pension Plans, Union Pension Plans, and other state and local government pension plans).
If, as part of your divorce or legal separation, you have agreed or have been ordered by the Court to transfer some or all of your retirement plan benefits to your former spouse, then you may need a QDRO signed by the Court for the Plan Administrator to execute the transfer. All employer-sponsored plans will need a court order. Most IRAs do not need a QDRO, however it seems that more IRA administrators are asking for them. SEP IRAs normally do need one.
In addition to dividing retirement plans as part of a divorce for dividing marital property, QDROs can also be used to pay for outstanding child support and alimony.
When should I have the QDRO prepared?
It is best to have your QDRO prepared as soon as possible after you have signed your separation agreement. This gives time to have the draft order prepared and then pre-approved by the Plan before it is submitted to the Court. Otherwise you should have it done as soon as your divorce or legal separation is finalized by the Court. Why is this important? The longer you wait, the more likely it is that the Plan will be moved to another fiduciary and they may not have the records to execute your agreement. The participant may borrow money from the plan or withdraw from it, and if there is not enough money left in the plan to pay your award, you may have to go back to Court to get the rest of the money you are owed. With Pension plans, if the Participant dies before you have executed the QDRO, and you are not still the beneficiary, you will probably not get what you thought you were going to receive.
Why use McBride QDRO Services?
We have prepared thousands of QDROs since 2006 for attorneys and divorcing people. Model QDRO forms provided by the Plans may not reflect your agreement or order of the court, and may be biased towards to either the Participant (often) or Alternate Payee (rarely). It is best to make sure your QDRO is prepared by a professional who can make sure it reflects your Decree of Dissolution or Legal Separation, or in the case of using QDROs for past due child support or alimony, the Order of the Court ordering the payment of the arrearages.
We aim to finish drafting requested Court Orders in two business days after receiving the fee and all the information we need. (see our Getting Started page)
All of our QDROs are guaranteed to be accepted by the Plan. If there is ever a problem with the Plan accepting the QDRO we have drafted, we will fix it without question or cost to you.
We can help mediate the drafting of language in the separation agreement to avoid future conflicts about what was the intent of the parties. This is a separate service from the QDRO preparation service.