Eight: Retirement Accounts (QDRO)
One of the final and most important factors of the divorce is the retirement savings. Often the highest in volume, these are the most valuable for the sustained future of both parties. The proceedings of the retirement accounts can be quite complicated but are necessary. A large number of couples filing for a divorce have one person in the couple on an employer-sponsored retirement plan such as a pension plan or a 401(k).
Technically, if your spouse has one of these employer-sponsored plans, you are entitled to a part of that payout unless you have signed a prenuptial agreement that says otherwise. The usual concern that most people have regarding this is whether or not the spouse will actually end up paying that amount of money over the many years in the future. The answer for this is the QDRO.
Qualified Domestic Relations Order (QDRO)
A Qualified Domestic Relations Order is a court order associated with alimony, child support as well as property rights that can instruct a spouse’s employer-retirement plan on how to pay off your share of the benefits in the coming future. This document acts as a safety net for your rights when it comes to the pension plan that your spouse is being given.
Funds in the retirement savings account are separated and withdrawn without penalty to be deposited into your retirement account. Banking solely on the divorce decree that states your right to retirement funds is not the right thing to do because of cases where employers have not bothered about the decree and have gone out to provide benefits only to the employee. Therefore, a QRDO acts as a much-welcome safety net.
As is clearly elaborated, there are a lot of factors and considerations that determine the exact details of a divorce when it happens. A divorce might be a very uncomfortable situation to be in if you are not expecting it and are not equipped to deal with the procedural requirements of it.
Therefore, it is imperative that every married spouse goes through the details of divorce settlements that apply to the place they reside in so that they are well informed and prepared to deal with the consequences and repercussions of the divorce once the settlement is determined. It is also very important to find a good source of advice when it comes to divorce because of the impact it may potentially have on your individual future as well as that of your children.
Hiring a good lawyer and taking preventive measures to secure and protect the value of property might be a good idea such that the division of property can be clean and quick when the time comes. Understanding the details of this article will go a good distance in helping you secure your assets before walking into a divorce hearing.