FAQ: How to Make the QDRO Process Easier? (Guest Blog: Sharee Burkel, President, The QDRO Company LLC)

FAQ:  How to Make the QDRO Process Easier? (Guest Blog: Sharee Burkel, President, The QDRO Company LLC)

ANSWER:  To have access to your share of marital retirement funds ASAP after a divorce using a QDRO, follow these five steps:

At best, getting a QDRO drafted, entered with the court and accepted by the retirement plan administrator can take 30-45 days.  Realistically, the process from beginning to end can take more like 3-6 months.  This is a long time if you’re waiting for the QDRO to be accepted so that you can withdrawal money from your ex spouse’s 401(k). 

How can you help the process move more quickly?

1.    Full Recent Statement.  Have a recent statement (dated within the last 90 days) for each retirement plan being divided.  We recommend a full statement that includes the legal name of the retirement plan and account holdings (for a 401k plan) or details of future monthly benefits (for a pension plan).  A computer screen shot is often insufficient.

2.    Know Your Type of Plan.  Know and understand the type of plan being divided (for example, a 401(k) versus a pension) and what each retirement plan being divided will and will not allow to be assigned to an Alternate Payee.

3.    Know Your Plan Name.  Reference the full legal name of each retirement plan being divided in your settlement agreement or divorce decree. 

4.    Clearly Identify What’s Being Divided.  Appropriately address the division specifics of each retirement plan being divided in your settlement agreement or divorce decree, identifying the following:

a.    Defined Contribution Plans (i.e., 401ks, 403bs, profit sharing plans)

                                          i.    gains and losses – include or exclude?

                                         ii.    plan loans – include or exclude?

                                        iii.    Be careful dividing the account between two dates as the plan administrator

may not have record of the value of the account at the time of marriage.  

b.    Defined Benefit Plans (i.e., pension plans)

                                          i.    When the Alternate Payee can commence benefits (i.e., shared or separate

interest payments)

                                         ii.    Retirement supplements, subsidies and cost of living adjustments

                                        iii.    Pre-retirement survivor annuity

                                       iv.    Post-retirement survivor annuity

5.    Obtain Your Plan’s QDRO Procedures.  Request a copy of the retirement plan’s QDRO Procedures. Before the divorce is finalized, the non-employee spouse is often considered an interested party and the plan administrator is more willing to share information about the plan.   Once the divorce is finalized, getting information from the plan administrator can be difficult and result in time delays as the only person that can typically request information without a subpoena is the Participant.

NOTES FROM BANFIELD COULING LAW & MEDIATION: 

(1) Thank you to Sharee Burkel, president of The QDRO Company LLC, for this important information – which often affects a couple’s largest asset in a divorce or separate maintenance action.

(2)  Listen to our guest blogger, Sharee Burkel, address “QDROs in Divorce” in more detail on the podcast, 52 Pearls, with Financial Advisor Melissa Joy, CFP:
https://open.spotify.com/episode/69psAiKUZFCnDHa2zmY2pk?si=XACySnEdQpeT24RFC03d2A

PLEASE NOTE: This blog is not intended to constitute legal, financial or tax advice.  We do not recommend making important decisions of the type addressed in this article without specific legal or professional financial advice in advance.  We at Banfield Couling Law and Mediation PLLC are here to help navigate your legal matter at any stage of your divorce.