Qualified Domestic Relations Order

What is a QDRO and why would I need it or want it?

QDRO stands for Qualified Domestic Relations Order, and it is a vital tool in enabling courts to handle the division of pensions, retirement accounts and other similar funds.  A combination of federal and state laws allows a court to apportion pensions and retirement accounts without penalties and tax consequences, and to do so in a way that does not effectively destroy the investment.

Administrators of pensions, retirement accounts and similar funds have very specific requirements for dividing these accounts.  The failure to follow these requirements can result in the administrator refusing to accept the order and disburse the funds. Only an experienced attorney with expertise in drafting QDROs can provide you with the proper language that will allow the disbursement of investment funds in the manner the court intended at the time of its Judgment.

In a high asset divorce, QDROs are not only common, they are necessary.  It is highly unlikely that parties with a great deal of wealth tangled in pensions and investment funds and other future interests can divide these assets without huge tax consequences or devaluing the asset absent the use of a QDRO.