There are currently millions of workers covered by employer-provided retirement plans in the United States.
For most of these people, retirement savings represent one of their most significant assets. For a married person, especially one that is about to be divorced, it is important to know how his or her interest will be divided at this time.
Under the law, any assignments of retirement benefits must comply with Federal law (the Employee Retirement Income Security Act of 1974) and the Internal Revenue Code of 1986. Under these laws, “retirement interests may be assigned only if the judgment, decree, or order creating or recognizing a spouse’s, former spouse’s, child’s, or other dependent’s interest in an individual retirement benefit constitutes a qualified domestic relations order or QDRO.”
A QDRO is an order that needs to be included in a divorce agreement when retirement benefits are involved. It establishes your soon-to-be ex-spouse’s legal right to receive a designated percentage of your benefits.
Qualified domestic relations orders require precise details on each retirement plan the orders apply to. It is important to note that there can be tax consequences associated with QDROs. Any benefits received could result in tax burdens for you.
If you are interested in learning more or would like to seek a qualified domestic relations order obtain the services of a skilled lawyer who can properly advise you and/or correctly draft the required documents.
At the Orange County family law offices of Amy M. Montes, we are well versed in the laws and statutes regarding all aspects of divorce, and can guide you toward achieving the best possible outcome for your future.
