DIVIDING RETIREMENT PLAN DURING DIVORCE
If you’re getting a divorce and your spouse has a pension or retirement, you are probably entitled to part of their pension or retirement. A retirement plan is usually a couple’s most significant financial asset other than a home or business. Spouses often express concern about what happens to assets accumulated in a retirement account if a married couple separates or divorces. Upon divorce retirement and pension are subject to a community property division assuming that no exemption applies like a pre-nuptial or postnuptial agreement, or if the pension was realized prior to marriage.
Many times pensions and retirement funds are not valued correctly as a pension’s value is not received until a prescribed period in the future and the spouse may not be aware of the amount of these funds or how to contact the plan administrator.
What is a QDRO:
The division and designation of pension and retirement funds must be included in the divorce decree. A Qualified Domestic Relations Order, more commonly referred to as a QDRO, is implemented by a court order or after the divorce decree is filed. A QDRO is a legal document used to determine the amount of retirement a spouse is entitled to and when it will be released to that spouse. The QDRO must be approved by the court and then it can be submitted to the retirement plan administrator who must also approve it.
A QDRO is a document with written instructions that comply with specific retirement plan terms and this document instructs the retirement plan administrator as to how the pension benefits are to be divided between the parties. Most of the time employers have a specific approved QDRO for their plans.
Normally with a pension or retirement the employee is the participant and the spouse is the alternate payee. The designated alternate payee is normally one of the following:
- Spouse of the plan participant
- The ex-spouse of the plan participant
- Child of the plan participant
- Dependent on the plan participant.
If you have questionss on dividing your retirement or a spouse’s retirement during the marriage or at the time of divorce or separation Jacovino Law Office can help. Please contact us at (702) 776-7179 or schedule a consultation online at https://jacovinolaw.com/schedule-a-consultation/