Serving Clients in Knox, Blount, Anderson, Loudon, Sevier & Roane Counties

What Is a QDRO?

During the pendency of a divorce, the parties’ assets must be evaluated and equitably divided. Oftentimes, one of the most valuable assets of a marriage is a retirement account. A retirement account can be a pension plan, 401(k) account, 403(b) account or some other type of tax deferred savings plan. To divide most retirement accounts, a special order is required called a Qualified Domestic Relations Order or “QDRO.”

Because a retirement account is funded by pre-tax dollars and subject to federal laws, the division of a retirement account requires a special order, usually in addition to a final divorce judgment.

If parties have comparable retirement accounts, then each can keep their own but if one party’s account is more valuable or if only one party has an account, then a division of an account is typically required.

The party that participates in the retirement account is called the participant and the party receiving a portion of the account is called the alternate payee. A QDRO instructs the administrator of the retirement plan to apportion a specific amount or percentage for the benefit of the alternate payee. Many plans have model forms for QDROs upon request but it is important that the form submitted complies with the particular requirements for each plan in order to be properly implemented.

If you are contemplating a divorce, it is important that you consider the value of the retirement accounts for each party and how they should be equitably divided and the impact on the marital estate.

Need help with a divorce or the accompanying documents? Call (865) 685-4780to schedule a case assessment with Melanie Hogg, our QDRO expert, or another Held Law Firm attorney.