What is a QDRO in a divorce?

QDRO divorce money

The division of assets in a divorce can be extremely overwhelming for both parties. However, certain assets cannot be divided in a divorce. This is because not all assets are considered marital property. In certain divorce cases, spouses may seek a portion of their former spouse’s retirement fund to be granted to them. The spouse seeking a portion of their former spouse’s retirement benefits will have to request a qualified domestic relations order (QDRO) which is a legal document that grants this division. Typically, individuals will earn retirement benefits through their employer via a retirement plan.  Tennesse is an equitable distribution state which means retirement accounts are considered marital assets, which means certain types of retirement plans are up for division in a divorce. If you are seeking a divorce, don’t hesitate to contact a qualified Memphis, Tennessee Property Division Lawyer who can help you request a QDRO. 

How does a QDRO work in a divorce?

Essentially, a QDRO is a legal decree that a judge must sign for a spouse to receive a portion of their ex’s retirement assets. Before a judge signs a QDRO they will evaluate each party’s financial situation. If the judge believes it is a reasonable request, a spouse may be granted a certain amount of their spouse’s retirement funds. QDROs may be granted to fund child support, alimony, and marital property rights. Individuals who are granted QDROs are referred to as alternate payees. Alternate payees have the right to a portion of the participant’s (former spouse) retirement benefits. Typically, individuals worry they will lose all of their retirement assets, however that is not the case. Individuals will still receive the full amount of their retirement benefits. A QDRO must comply with the Employee Retirement Income Security Act (ERISA). In Tennessee, retirement funds are protected under domestic relations laws.

What types of retirement plans can be divided?

There are several types of retirement plans that can be divided with a QDRO in a divorce. Essentially, any qualified retirement plans can be divided. The following retirement plans are up for division:

  • 401 (k) plans
  • 403 (b) plans
  • 457 plans
  • Profit sharing plans
  • Employee stock ownership plans
  • Tax-sheltered annuities
  • Money purchase plans

What types of retirement plans cannot be divided?

Several retirement accounts may be divided in a divorce. However, they will not be divided with a QDRO. Typically, any retirement accounts that are not “qualified” are not up for division. The following retirement plans cannot be divided:

  • Individual retirement accounts (IRA)
  • Government pensions
  • Military pensions
  • Deferred annuities and contribution plans

If divorce is imminent, reach out to one of our skilled and determined team members. With years of experience, our firm can help you request a QDRO which will grant you a portion of your former spouse’s retirement benefits.