Friday, February 5, 2016
From Fox Business:
A Qualified Domestic Relations Order (QDRO) is an order that needs to be included in a divorce settlement agreement to provide former spouses their share of Erisa-qualified retirement assets. In order to receive your fair share of assets saved during the years you were married, a QDRO will ensure your rights under these retirement plans are fully protected. QDROs should be prepared by a qualified family lawyer who understands the tax implications and other consequences of dividing the full range of retirement assets.
Connie Buffington, a family lawyer with the Atlanta office of Boyd Collar Nolen & Tuggle, offered the following tips to FOXBusiness.com on what divorced retirees need to know regarding their rights involving their ex-spouse’s employee benefit or pension plans.
There are three common mistakes when dividing qualified retirement assets (e.g. 401(k) plans) and non-qualified retirement assets (e.g. IRAs) during a divorce: not considering potential tax consequences and liabilities; not defining the method by which a traditional pension plan is to be divided; and not accounting for the treatment of investment gains or losses in the context of the division.
QDROs are required to divide assets held in ERISA-qualified plans in connection with divorce. They can also be used to facilitate alimony and child support payments. They’re not required to divide IRAs or non-qualified plans, such as deferred compensation plans, supplemental pension plans, long-term incentive plans or stock ownership plans.
Read more here.