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A QDRO? What does that even mean and why do I need it?

During the divorce process, you deal with numerous issues regarding the division of the property you and your spouse accumulated during the marriage. Texas is a community property state, so the courts begin with the assumption that each of you owns all property jointly. You will more than likely spend a significant amount of time determining what property comprises the marital estate and what property belongs to each of you separately.

One of the assets you may deal with is an employment-related retirement account, such as a 401(k) or pension. You may not want to part with even one dollar of your account, but if you spent your marriage building up that account, at least the portion of it accumulated during the marriage belongs to the marital estate. Therefore, you may end up giving a portion of it to your spouse as part of your divorce settlement.

Okay, so what does this have to do with a QDRO?

If you remember, when you started contributing to your retirement account, you were told that withdrawing any of its funds prior to retirement would incur a substantial penalty. When you divide your retirement account in the divorce, you can avoid that penalty with a qualified domestic relations order, or QDRO.

The court issues the QDRO as part of your divorce settlement. It can either be included in the settlement or attached to it and incorporated into it by reference. You may want the QDRO to exist on its own since you must provide a copy of it to your plan administrator. He or she does not need to know the particulars of your divorce outside of this issue.

Speaking of your plan administrator, you may want to ask what language your plan requires in order to comply with a QDRO. Otherwise, you may not find out until later that the order is insufficient.

What should I include in the QDRO?

Other than any particulars required by your unique retirement plan, these orders all contain the following minimum information:

  • The names and addresses of you and your soon-to-be former spouse
  • The names of each plan subject to the order
  • The dollar amount or percentage to be paid to your soon-to-be former spouse
  • The deadline to distribute funds or the number of payments

When you contact your plan administrator, he or she may provide you with a QDRO form. You may want to run it by your attorney before presenting it to the court to make sure that it complies with current law and fulfills your needs as intended.

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1521 Austin Ave.
Waco, TX 76701

Phone: 254-633-3048
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