One issue that divorcing couples often have to contend with is the division of retirement assets, including 401(k) accounts. It is important that they understand the correct process for dividing such retirement assets. By not taking the proper steps, an ex-spouse could have to pay hefty expenses and tax assessments.
Someone who is entitled to a portion of their future ex-spouse’s workplace retirement plan will have to complete a qualified domestic relations order to obtain their share legally. A QDRO has to be used whether the plan in question is a conventional pension plan or a 401(k) plan.
It’s important to understand that a QDRO is a legal document that’s distinct from the divorce agreement even though its contents are based on what is specified in the agreement. A spouse seeking to have a QDRO completed should strongly consider using the services of an attorney who has experience drafting such legal documents.
To ensure a seamless workplace retirement plan transfer, the administrator of the plan should be contacted by the attorney who is drafting the QDRO. Before the completed document is submitted to the court, the ex-spouse should review it with their divorce attorney to verify that the contents reflect the intent of the divorce decree. If there are multiple retirement accounts that have to be divided, a separate QDRO will have to be completed for each plan.
A family law attorney may help a client obtain favorable settlement terms regarding property division. This includes the division of property such as workplace retirement accounts.