Qualified Domestic Relations Order (QDRO)
A qualified domestic relations order (QDRO) is a specialized court order
usually created pursuant to a divorce, or child support order, which authorizes
a retirement plan to split the accounts between the parties. A QDRO is
a federally-mandated order, which is issued by the family court, that
granted the divorce. A QDRO must be carefully drafted to the exact specifications
of the retirement plan, and it must also meet both federal and family
court standards.
Retirement plans we work with
We provide QDRO preparation services for private,
government, and military retirement plans including:
- Individual Retirement Accounts 401(K)
- Defined Contribution Plans
- Defined Benefit Plans
- Thrift Savings Plans (TSP)
- Private Pension Plans
- Civil Service Pension Plans
- Military Pension Plans
Special rules to keep in mind when dealing with distributions from a QDRO
- Generally the IRS 10% early distribution tax penalty is waived for
the plan participant when funds from an eligible retirement plan is
subdivided incident to a divorce and executed via a QDRO.
- A QDRO distribution that is paid to a child or other dependent is
taxed to the plan participant.
- The receiving spouse may be able to roll over tax-free, all or part
of a distribution from a qualified retirement plan, which is received
under a QDRO.
- You must include in your income, any part that you don't roll over
within 60 days to another qualified retirement plan or to a traditional
or Roth IRA.
- Also 20% of the distribution may be withheld by the plan administrator
for income tax purposes.
- You can file for a return of the 20% withheld when you do your annual
taxes.
- See
IRS Publication 575 and IRS
Publication 504
Our QDRO Services Include
- Personalized service from start to finish
- Review of your property settlement agreement
- Identification and verification of all accounts
- Obtaining agreements from the parties
- Drafting an initial order to comply with your property settlement
agreement
- Working with the plan administrator throughout the pre-approval
process
- Prepare final order for submittal to your local family court for
signature
- Obtain the necessary certified orders
- Submit QDRO package to the plan administrator for processing
