Dividing Retirement Plan Assets in a Divorce

Even through the difficult process of a divorce, it is critical that informed financial decisions are made regarding the division of the property that was accumulated during the marriage. Retirement savings are one of the largest assets many people own, and therefore it usually becomes an important issue in divorce proceedings.

For instance, if your spouse has an employer-sponsored retirement plan such as a 401(k) or pension plan, you're legally entitled to part of the balance. But how do you protect your share? What's to stop your spouse's employer from paying out the benefits to your spouse or ex-spouse, leaving you with little or nothing?

A Qualified Domestic Relations Order (QDRO, pronounced "quad row") can protect your interests. A QDRO is a court order, judgment, or decree related to child support, alimony, or property rights that instructs your spouse's pension plan how to pay your share of plan benefits.

QDROs only apply to plans that are IRS tax-qualified and covered by the Employee Retirement Income Security Act (ERISA). They do not apply to military or government pensions, which are governed by other laws. A QDRO can provide protection that a marital settlement agreement does not, so coverage shouldn’t be assumed just because a divorce decree states a right to part of your spouse's retirement funds.

The attorneys at Dishon & Block specialize in the preparation of QDROs which is an important consideration to ensure that all of the related issues in your marital settlement agreement are incorporated into the QDRO and that your rights are fully protected in a way that a generic QDRO form can't provide.

Our firm has the experience with drafting the necessary court orders to effectuate the division of pension plans.  When there are more complicated issues, our multidisciplinary approach allows us to seek the assistance of actuaries and pension experts who are able to value and or assist in the division various pension plans.