What is a QDRO?




McFarlane Law, PLC
14500 N. Northsight Blvd, Suite 217
Scottsdale, AZ 85260

Phone: 480-991-0032
Fax: 480-483-6673

The term “QDRO” stands for qualified domestic relations order and its purpose is to divide retirement benefits in a divorce. Just like a house or a bank account, retirement plans are assets that can be divided during the divorce process. However, unlike bank accounts and houses, a special order is required to properly divide a retirement account and to outline the consequences of such a division to each party. These orders can be filed as part of the divorce process itself or may be drafted and signed after the divorce has concluded. Many divorces simply state the amount of the benefit each party is entitled to without filing a proper QDRO to actually make the division happen.

How Do I Know If I Need a QDRO?

If you or your spouse has a retirement account and you are going through or considering a divorce, you may need a QDRO. Often retirement accounts represent one of -if not the- the largest assets in any divorce. The QDRO allows you to divide this major asset and to determine how, when, and in what amount it will be split.

If you see the common phrase “a Qualified Domestic Relations Order (QDRO) or other order shall be entered by the Court for submission to and approval by the Plan Administrator(s)” you need a QDRO. The Court will often specify the major terms needed in a QDRO and require the parties to obtain the document after the divorce decree is signed. Without having a QDRO entered by the Court, your Property Settlement Agreement is not complete and requires further action to ensure the agreement is enforceable and valid.

When Should I Contact a QDRO Expert?.

The earlier in the divorce process the better. A QDRO Expert is not only practiced in drafting the order itself, but will be able to give you a better idea of your options and the value of the plan itself. This expert can work in tandem with your divorce attorney to ensure you know what you are getting and aren’t tricked into accepting less than you are entitled. There are many complex issues surrounding retirement plans and not every attorney is up to date in their knowledge

Failing to be knowledgeable about the latest case law and legislation can lead to serious consequences for your divorce. A QDRO Expert is on the cutting edge of these issues and ensures you are never confused about the process or your share of the retirement accounts.

Why is a Tax Attorney doing QDROs, isn’t my family law attorney capable of drafting these orders?

While some family law attorneys are knowledgeable about QDROs and their consequences, many just don’t have the time or expertise. A large part of QDRO drafting and design focuses on tax implications and complex formulas. As Tax Attorneys we have the expertise and experience to understand these formulas and to ensure you don’t run into problems with the IRS or other tax agencies.

What is Your Approach to Drafting a QDRO?

At McFarlane Law, PLC we focus on providing the highest level of service and knowledge in representing our QDRO clients. While many attorneys may give you a flat fee, this is simply a recipe for disaster. We believe in doing everything possible to ensure a QDRO is done once and done correctly. A flat fee arrangement simply gives your attorney the incentive to do the document quickly with as little contact with you as possible. If the document is prepared incorrectly, you will not know for many years to come.

We believe the best way to achieve our clients goals is to keep them aware of their options and the process itself. We take the time to explain to our clients every aspect of our representation and to make them aware of what the document we produce means for their situation. Without this type of knowledge and interaction there is no way to be sure we understand our client’s goals, expectations, and desires.

If you think you may need a QDRO, contact us here at McFarlane Law, PLC for a free consultation. We do the math so you don’t have to!

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