During a divorce case, you may have to divide many of your marital assets. Some of those assets may include your 401(k) or retirement accounts, among other investments. If that’s the case, then you will likely need a qualified domestic relations order, better known as a QDRO.
A QDRO establishes that your estranged spouse, and soon to be ex-spouse, has a legal right to a portion of certain assets included in the document. For example, if you have a 401(k) and your ex-spouse will be entitled to 25 percent of the marital portion as a result of your divorce settlement, then that can be transferred to your ex-spouse without penalties or taxes through a QDRO.
Do you need an attorney to create a QDRO?
Normally, attorneys don’t prepare QDROs for clients, but they work with QDRO preparers who can be contracted to write one up. For that reason, it’s usually a good idea to discuss the need for a QDRO with your attorney, so they can let you know if they can complete it or if they can contract that work out.
If you’re not sure about needing a QDRO, your attorney can talk to you about your assets and if you have retirement accounts or stocks to divide upon divorce. There are many things you can include in your QDRO, and your attorney will make sure you know about them and how they affect the order. Your attorney can also help you understand what has to happen for the assets to transfer without incurring penalties that could affect their value.