In the unfortunate event that you or your spouse file for a divorce, you may be wondering just how the New Jersey courts will divide up your marital assets. And especially if you are pursuing a divorce later on in life, you may be wondering just how your retirement assets will be distributed. Notably, your retirement plan can be handled with a tool known as the qualified domestic relations order (QDRO). Follow along to find out whether you need to establish a QDRO in your divorce and how one of the proficient attorneys from our Morris County divorce & separation law firm, Haber Silver Russoniello & Dunn, can guide you in doing so.
What is a QDRO?
By definition, a QDRO is a judgment, decree, or court order for a retirement plan that may cover child support, alimony, or marital property rights to a spouse, former, spouse, child, or other listed dependents on the retirement plan.
So, in the instance of your divorce, you may be considered the participant of your retirement plan and your former spouse may be considered the alternative payee of your retirement plan. So, with this specific judgment, decree, or court order, you will be required to have a portion of your retirement plan assigned or paid to your former spouse once you go your separate ways.
Do I need a QDRO in my divorce?
It may be essential for you to establish a QDRO in the instance of your divorce. This is because a retirement plan administrator usually cannot split up your retirement funds between you and your former spouse without one in place.
Once you have established your QDRO, your retirement plan administrator will have clearance to split up your 403(b), your 401(k), and your other qualified retirement plans between you and your former spouse. With this, your former spouse will be able to transfer or rollover this money into an existing or a new retirement account under their name. They may receive these benefits while you are still alive. But if you, unfortunately, pass on, then they may still be eligible to receive survivor benefits.
What should I include in my QDRO?
When drafting your QDRO, you should include the following pieces of information:
- Your name and your current mailing address.
- Your former spouse’s name and last known mailing address.
- The dollar amount or percentage of benefits to be paid to your former spouse.
- The time frame of these payments.
- The plan for these payments in the unfortunate event of your death.
- The plan for these payments in the unfortunate event that your retirement plan is terminated.
You likely prefer that this transfer of retirement assets goes as smoothly as possible. So, you should not hesitate in retaining the services of one of the talented attorneys from our firm. We look forward to hearing from you.