A QDRO, or qualified domestic relations order, is a legal decree issued by the court as part of divorce proceedings. When dividing marital assets, the court may decide that one spouse can claim a portion of the other spouse’s retirement account. The QDRO provides permission for a penalty-free early withdrawal the retirement plan must allocate based on the couple’s property division arrangement.
New York is an equitable division state, which means that the court must divide assets and debts fairly, but not necessarily equally. Learn more about how to obtain a QDRO when determining property division during divorce.
Seek documentation of assets
When you file your divorce petition, you can request to receive a portion of your spouse’s retirement accounts. The court requires each party to provide full financial disclosure. He or she will have to supply the plan document, summary plan description, account statements and other documentation that the judge uses to determine the value of the plan. You or your attorney can also contact the plan directly if your spouse refuses to supply the required information.
Create a QDRO
Once you have the necessary details, you can draft a QDRO for court approval. This document must include:
- The name and current address of the plan owner (your spouse)
- The name and current address of the alternate payee (you)
- The percentage of the plan the court determined you will receive
- How the court determined that percentage
- The amount and number of payments the court ordered
Submit the QDRO
If the court issues a QDRO when dividing marital property, the plan must approve the terms of the order. Send the QDRO to the plan administrator upon receipt. If the plan accepts the order, you will receive a payout as indicated by the court. If the plan rejects the order, you will receive details about how to update the QDRO for acceptance.
If you and your spouse agree on property division, you can still benefit from a QDRO. This document carries tax advantages when you withdraw retirement funds early.