Property division can be a major hurdle when preparing for divorce, especially when couples share resources that they may need to rely on in the future, like retirement savings. The longer couples remain married and the more they earn during a marriage, the greater the possibility that they may have set funds aside for retirement during the marriage.
Those who make regular contributions to retirement accounts can defer income tax obligations and ensure their comfort in their golden years. However, if they divorce, they may need to divide the retirement savings set aside during the marriage. Deposits made during the marriage are often subject to division during a divorce.
A qualified domestic relations order (QDRO) is a tool that allows for the division of retirement savings without penalties. Who usually drafts a divorcing couple’s QDRO during a divorce?
One of the lawyers drafts the QDRO
Certain divorce documents come straight from the courts. A judge issues a property division order and a custody order, as well as support orders if necessary. However, a QDRO usually comes from one of the spouse’s lawyers.
Either spouse can have their attorney draft the QDRO in accordance with the property division decree. They can then submit it to the courts and the other spouse for approval and necessary signatures. The QDRO must then go to the party managing the retirement resources so that they can divide the account into two separate funds.
Those who follow the process properly can fairly share their retirement savings without diminishing them unnecessarily with fees and taxes. This is just one example of why understanding the rules that govern crucial divorce documents may benefit those with more complex marital estates.