Thursday, March 19, 2015


Dividing Retirement Benefits in Divorce

Often the most significant assets to be divided in a divorce are retirement benefits. These valuable assets come in several forms.
1.     DEFINED BENEFIT PENSION plans such as teacher's retirements, state and local governments pensions, autoworkers pensions and other large corporate and union pensions.

2.     DEFINED CONTRIBUTION plans such as 401-k, 403-b plans and IRA's.


A Judgment of Divorce and/or divorce agreement will state the manner in which these assets are to be allocated or divided and direct that one party must pay a certain portion to the other spouse, judgments and agreements do not, by themselves, cause the distribution to take place.

After a  divorce is final a special court order is needed to actually cause the distribution. A Qualified Domestic Relations Order (QDRO) or a Domestic Relations Order (DRO) is needed to legally and administratively transfer a portion of a pension or 401-k earned from one spouse to the other spouse.

For defined benefit pensions a QDRO or DRO is needed to insure that when the pension plan participant retires, five, ten or more years in the future, the spouse or alternate payee actually receives their share directly from the pension administrator.

Also, be aware that just because you retained an attorney to represent you in your divorce, does not mean that your former divorce lawyer is responsible for or will actually prepare these special post-divorce orders. Many divorce lawyers do not prepare these orders and if they do they require a separate retainer agreement and payment.

If you have questions regarding the preparation of a DRO or QDRO please call me. I have been preparing these orders for many years and have the experience needed to do so competently, efficiently and sometimes most importantly promptly.

DO NOT wait until your former spouse retires because so many things can happen before that occurs that will make the preparation of the order more difficult or impossible.

Your former spouse may remarry, relocate, change jobs, take an early retirement incentive plan in a lump sum or your former spouse may even die. If your former spouse dies before retirement and has designated a new spouse or other person the beneficiary, a costly lawsuit may be needed and there are so many different circumstances that a lawsuit may not even be successful.


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