During a marriage, spouses could make long-term financial arrangements for their retirement accounts. When a married couple in New York divorces, one spouse may have significant concerns about their retirement planning. What if the ex-spouse's pension was supposed to factor into financial stability later in life? Individuals with such concerns may wish to look closer at a qualified domestic relations order.
A qualified domestic relations order, or QDRO, refers to a court order that designates a portion of one ex-spouse's retirement benefits to another. The spouse that earned the benefits is dubbed the “participant” while the spouse seeking the benefit is known as the “alternate payee.” The alternate payee is not necessarily limited to accessing those benefits while the participant is alive; the alternate payee could potentially access funds from survivor benefits. Each case and QDRO ruling may be different, however.
Quite often, a QDRO is sought during divorce proceedings and might be awarded as part of the divorce decree and settlement. It might still be possible to procure a QDRO years after finalizing a divorce.
Certain aspects of these orders could make them complex. The court could issue a domestic relations order, but the order won't be qualified until the retirement plan accepts it. The accepting entity must be a private employer. With government entities, the order is referred to as a court order acceptable for processing, or COAP.
Individuals should be aware that rulings in a divorce decree might not be enough to facilitate the payments. Procuring a QDRO as a separate document may be necessary.
Those who seek a divorce and have questions about a QDRO may ask an attorney for advice. The attorney might detail all the specifics and complexities associated with the document. The attorney may seek a QDRO during divorce proceedings. The attorney may even be able to reopen a divorce years after an initial decree to procure a QDRO.