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A QDRO can help divide retirement assets in divorce

On Behalf of | Feb 8, 2024 | Divorce |

When getting divorced, retirement assets can become complicated. If you have an actual investment portfolio or a bank account account holding your funds, you can divide this between the two of you. But many people have more complex retirement assets.

For example, perhaps your retirement plan was to use your spouse’s pension. They’ve been earning it throughout your marriage, as part of their employment. They haven’t retired yet, so they’re not being paid and you do not have access to the pension. Is there any way to divide it in a divorce?

Using a qualified domestic relations order

The answer is to use a QRDO, or a qualified domestic relations order. The court can determine what percentage of the future pension should go to each individual. They can then issue an official order that has to be followed. Even though your spouse isn’t getting pension payments yet, they have to divide those payments with you when they start.

This doesn’t mean that you will necessarily get half of the pension or anything of that nature. The court will consider how long your spouse has been working, the total value of the pension, other financial details of your relationship, the percentage of the pension earned during the marriage and things of this nature. The calculations can get fairly complex. But it is important to remember that the entire pension doesn’t necessarily have to go to your spouse just because they are the one who is earning it.

Setting up the paperwork

Are you looking into asset division during a divorce and considering the use of a QDRO? Be sure you know what legal steps to take.