QDRO stands for Qualified Domestic Relations Orders. An order of this nature will typically accompany a retirement plan or pension.
A QDRO is a legal document used in a divorce or legal separation to split retirement plans without tax penalties.
Unfortunately, QDROs are quite complex, and making mistakes on these documents can cost a fortune. Below, we’ve outlined how the QDRO process works.
The Steps To Take In the QDRO Process
#1 - Gather all necessary information.
The first thing you need to do is put together all of the necessary information, such as:
- Social security numbers
You’ll also need a copy of your divorce decree, the Summary Plan Description for the retirement account, and the printed QDRO Procedures.
#2 - Your attorney drafts your QDRO.
Your attorney will use the above information to draft your QDRO and then you will need to verify it for accuracy.
#3 - The document is sent to your spouse.
Once you have determined the document is accurate, it will be given to our spouse or their attorney for review and approval.
It should be accepted as long as it is accurate and follows the divorce decree, although sometimes there are complications.
#4 - The QDRO is sent to the plan administrator.
After your spouse reviews the document and determines it is accurate, it is sent to the plan administrator to be reviewed and approved in draft form.
It is common for plan administrators to request modifications and add their own language. These changes are typically inconsequential and shouldn’t alarm you.
However, some plans will choose not to review drafts in advance, in which case, this step is nixed.
#5 - The document is signed.
Once the pre-approval step is complete, both you and your spouse sign the document and it is submitted by your attorney for a judge’s signature.
#6 - Receive a certified copy of the QDRO.
The judge will file the document after signing it. Then, you and your spouse will need to obtain a certified copy of the QDRO. You can get a certified copy from a clerk of the court, but it’s important to note that you will be subjected to a small fee.
#7 - The document will be sent for final approval and division.
The certified copy is submitted to the plan administrator for final approval and division of the account.
This process typically doesn’t take a very long time, particularly if the document is pre-approved by the administrator.
How Long You Should Expect the Process to Take
No two cases are exactly alike, but you can expect the process to take about two to four months, assuming there are no delays. In general, the more retirement accounts that are assessed as community property and subject to division, the more complicated the QDRO will be.
Certain factors can influence the time it takes for the process to be completed, such as:
- How backed up the superior court is with processing court orders
- The intricacy of the plan
- How precise and appropriate the document’s wording is
- How quickly the plan is pre-approved or returned with significant changes
- How cooperatively you and your spouse can work together
The step that typically takes the longest is when the plan administrator reviews the draft plan.
If you have any questions about QDROs or any other documents related to divorce, our team is here to help. We are happy to answer your questions and help with whatever you need along the way. Don’t hesitate to reach out to our skilled attorneys right away with the details of your case.