A QDRO establishes "an alternate payee’s right to ... receive all or a portion of the benefit" payable to the owner, specifies the names and addresss of the each participant and each alternate payee, the duration of the order and identifies the plan or plans to which it applies. Specifically, the QDRO may only apply to existing benefits.

Problems may arise when the QDRO is not entered shortly after the divorce. Divorced spouses who may have had a legitimate claim on survivor’s benefits may find themselves locked out when a former spouse remarries and these benefits vest in a second spouse.

To divide a pension plan as a result of divorce, therefore, a QDRO must be prepared, a court must approve, and it must be accepted by the pension plan administrator.

In any marital settlement agreement where child or spousal support is paid, provision should be made for the death of the payor. This includes Social Security benefits, if applicable, and QDROs and DROs.

See also QDRO; DRO.

Your Suggestion

1. Change the Beneficiary
   After a divorce, a party should formerly change the beneficiary on any retirement instrument (such as an IRA), and not rely on state law, a divorce decree or a separation agreement to revoke the beneficiary status of a former spouse. Courts have held that despite the agreement of the parties, ambiguous language in waivers in separation agreements regarding survivor’s benefits can be insufficient to divest the designated beneficiary of his or her rights.
   Contributed on 10/5/2007 by: DivorceDex.com Staff

   Category: Retirement Accounts   (Applicable in All States)

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