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What is a QDRO?

A QDRO, or Qualified Domestic Relations Order, is a domestic relations order that allows a former spouse to receive a portion of the other spouse's retirement plan. Under federal law, a QDRO is necessary in order to divide retirement benefits.

Qualified Domestic Relations Orders have very specific requirements. A Minnesota high asset divorce lawyer can help you meet the requirements while protecting your rights.

"Alternate payee"

The spouse requesting the QDRO is an "alternate payee." A child or dependent can also be an alternate payee.

Formal requirements

In order for a domestic relations order to be a "qualified" domestic relations order under ERISA, it must contain:

  • The names of each retirement plan impacted by the QDRO
  • The names and addresses of the retirement plan participant and alternate payees
  • The time period covered by the QDRO
  • The percentage or amount that will be paid to the alternate payee or the method by which that percentage will be determined

Furthermore, the QDRO must not overlap with another QDRO, provide for more benefits than allowed by the retirement plan, or require payment of any benefits not covered by the QDRO.

The administrator of the retirement plan will review the domestic relations order to determine whether it is a QDRO. Plan administrators have specific guidelines for ensuring that each plan establishes reasonable procedures for determining payments. According to the Department of Labor, a state court does not have authority to decide whether an order is a Qualified Domestic Relations Order.

Dividing retirement assets through a QDRO

There are multiple ways to determine how much of the retirement assets each spouse should receive. Usually, if the plan was created after the parties were married, both parties will receive 50 percent of the assets. If, however, the plan was created before the marriage, the alternate payee will receive a portion of the plan's value (usually 50 percent) that is attributable to the marriage.

Source: United States Department of Labor, "FAQs About Qualified Domestic Relations Orders."

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