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Handling Your Retirement in a Divorce

Retirement benefits are one of the many issues that may need to be settled in divorce proceedings. For example, if one spouse participated in a 401K plan through his employer during the marriage, his wife would be entitled to some of the benefits when he retired. But when a couple divorces, it is necessary to plan for the division of the benefits-either immediately or upon the employee spouse's retirement.

This is where a QDRO comes in. The term QDRO, pronounced “quad row,” stands for Qualified Domestic Relations Order. A court will institute this order to divide the benefits of a given retirement plan among spouses when they dissolve their marriage. A QDRO is also important because it recognizes that there will be an alternate payee who can receive a portion of the benefits. This alternate payee can be anyone from a former spouse to a domestic partner to a child. A QDRO will enable any payee to receive a proper share of the retirement benefits. Furthermore, if one spouse already collected retirement benefits during a marriage, the other may be able to collect a share of those funds with a QDRO.

To obtain a QDRO, consult a legal professional in a timely manner. The process of obtaining a legally valid QDRO can take months, and it can take even longer to actually receive any benefits.