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What Is a QDRO And Should I Use One For My Divorce?

We know that divorce can be a complicated process when it comes to determining how assets are divided between spouses. Perhaps you heard about needing to file a QDRO, but you aren’t quite sure what it is. You are not alone! You can count on an experienced divorce attorney to guide you through this difficult process. To learn more about how a QDRO can be a helpful tool for your divorce, continue reading or contact one of our Morris County NJ Lawyers for quality legal assistance.


A QDRO is a qualified domestic relations order, which is a court order that ensures that a portion of a retirement place is paid to a spouse or dependant in the case of a divorce. QDROs can be used to pay for child support, alimony, or other needs, and they must comply with the Employee Retirement Income Security Act (ERISA). While typically a judge decides how assets and debts are split between divorcing spouses, the spouses will have to figure out how retirement plans are divided since they aren’t included with other assets. This is where QDROs come in handy because your ex-spouse won’t be able to legally receive your retirement benefits without a proper QDRO in place. QDROs are only used for 401(k)s and other qualified plans, but a process called “transfer incident to divorce” must be used for individual retirement accounts (IRA).


Completing a QDRO is essential if you plan to divide your retirement plan with your ex-spouse. A retirement plan administrator can only split the participant’s funds if a QDRO is in place. QDROs can make the asset division of the divorce process much more efficient. They are also incredibly important if one spouse has a large amount of savings in their retirement account because retirement funds aren’t automatically split. An ex-spouse can use the benefits from a QDRO to pay for new housing after a divorce. Assets from a QDRO can be sent to either an ex-spouse or a dependent like a child, so the funds can also be used for child support or other needs. With a QDRO, the participant (spouse with the retirement plan) won’t face any withdrawal penalties for transferring the funds to the ex-spouse.


You can draft a QDRO with your divorce attorney. The document will outline the specific amount of assets that should be transferred to your ex-spouse. Your attorney will then send the document to the retirement plan administrator to be approved before finally submitting it to the court. Once the QDRO is in place with the help of your attorney, you’ll be able to access the predetermined amount of your ex-spouse’s retirement plan. The funds won’t be taxed if placed into another retirement plan.

Looking for a compassionate divorce attorney to help through the process? Townsend, Tomaio & Newmark, LLC is on your side! Contact us today for a free consultation.