Qualified Domestic Relations Orders -- better known as QDROs -- are one of the most complicated and exacting aspects of a divorce. Without one, you cannot receive your rightful share of your spouse's pension and other retirement benefits, even if you were granted your share as part of your divorce. QDROs are special orders, without which the administrator of your spouse's retirement plan cannot make payments to you. Generally, only IRAs do not require QDROs for apportionment of benefits between spouses in a divorce.
Claiming Your Share
If a judge does not award you a portion of your spouse's retirement benefits when you divorce, you can't receive a QDRO. If you and your spouse don't agree to your share in a marital settlement agreement, you've also lost your opportunity to implement a QDRO. Therefore, your first request -- either in negotiations with your spouse or to the divorce court as part of your trial -- must be a demand for your share of your spouse's retirement benefits. You're usually entitled to a percentage of anything your spouse earned from the date you married until the date your marriage ended.
Your Divorce Decree
You must make sure your divorce decree or judgment specifically states that you are to receive a portion of your spouse's retirement benefits. Your decree should detail exactly what percentage you are to receive and when it is payable to you. You can't receive a QDRO unless this information is specifically spelled out in your decree. This is an important consideration because if you divorce by marital settlement agreement, many courts will simply incorporate your agreement into your decree "by reference." This means that your decree turns everything included in your settlement agreement into a court order, but it doesn't repeat all the terms and words of your agreement. Therefore, if you write your own marital settlement agreement and it does not include the correct language, your decree will turn the incorrect language into a court order and you will not be able to use it to get a QDRO -- at least not without going back to court to revise the language of your settlement agreement, which is not always possible.
Assuming your decree correctly provides for your share of your spouse's retirement benefits, you must next request a "model order" from your spouse's pension plan administrator. The administrator is the financial institution that manages your spouse's retirement plan. A QDRO is not a "one size fits all" legal document. Its language and terms depend on the requirements of each particular administrator and the specifics of the retirement plan itself. Therefore, you have to figure out what type of an order the plan administrator will accept. Model orders are sample forms that you can follow to format a QDRO to meet the administrator's specifications.
A QDRO isn’t legally binding -- and the plan administrator can't do anything with it -- until a judge signs it. This means you must submit your completed QDRO to the court for a judge's signature in the same county and state where you received your divorce. After the judge has signed your QDRO and returned a filed copy to you, you can submit it to the plan administrator. If you followed the model order exactly and made no other mistakes, the financial institution will honor your QDRO and award you your rightful portion of your spouse's retirement benefits.
The legalese involved with QDROs is extremely exact and dependent on each plan's rules. You probably should not attempt to draft one without professional help, even with a model order to follow. The model order is generic and may not specifically address the unique details of your spouse's retirement plan. If you retain an attorney to handle your divorce, most will oversee preparation of your QDRO after your divorce is final. Otherwise, you might want to enlist the help of a CPA experienced in divorce matters.