6 QDRO Tips For You
Are you looking into getting a QDRO in Saratoga? Check out these 6 QDRO tips for you that we put together, then give us a call to get started.
1) QDRO Process Explained
Typically, you should submit a QDRO with your judgment of divorce. Some judges are requiring that now; they didn’t use to. You can submit a QDRO later. However, you don’t want to run into the problem where you forget to submit it, and all of a sudden 5, 10, 15, 20 or more years go by. If something happens to your ex-spouse, and you haven’t submitted a QDRO, you’re not going to get the funds. You want to make sure that you do it as soon as possible, preferably when the judgment of divorce is forwarded to the judge.
2) Disinheriting Your Spouse to Protect Your Assets
- When one spouse tries to disinherit the other from their assets and estate, the New York State EPTL says, essentially, “You can’t do that.”
- The other spouse will obtain their elective share from probate and non-probate assets – even if those assets were bequeathed to someone else.
3) Obtaining Your Part of Your Spouse’s 401K if they Die
- The rights of a non-titled spouse should not be impacted by the death of the titled spouse when a defined contribution plan, such as a 401K, 403B, or other money account is divided.
- It is best to have an agreement providing for the non-titled spouse to remain a beneficiary for their share of that fund until the date of division.
- Another order can then provide for transfer of their share to them and out of the plan.
4) What Happens to My Pension or Deferred Compensation Account After a Divorce?
- A Deferred Compensation Plan is a plan that consists of a set amount of money that can be accessed at periodic intervals after the age of 59 and a half
- The deferred compensation plan is simply divided either in half, or by a percentage that either they or the court has ordered
5) Handling Two Pensions When Both Parties are Unsure on Retirement
- When both parties are close in age and each had a defined benefit pension plan that would pay a monthly benefit upon retirement, the first spouse to retire faces certain difficulty.
- When the first spouse retires, their retirement income could be reduced by half – with the other half of the pension going to the other spouse. If the second spouse does not retire, the spouse who did retire will not receive their share of the other’s retirement, but several solutions are available.
- A separate interest pension option can ensure that each party receives their share of each pension.
- If the two pensions are equivalent in value, each party can simply waive their right to the other’s pension.
- If the pensions are not equivalent in value, an expert can value both pensions and guide the parties in dividing them.
6) QDRO Distribution
When you get a QDRO done, typically in matrimonial, QDROs are divided 50/50. It’s per the Majauskas Rule, which is pursuant to case law. However, you don’t have to divide your retirement plan 50/50. If the parties agree, they can use whatever percentage that they want.
When couples divorce, the assets they’ve reserved for retirement can be divided proportionally without tax liability under ERISA, the federal statute that regulates retirement benefits. Whether your retirement plan is a defined contribution or a defined benefit plan, you will need a qualified domestic relations order (QDRO) signed by a judge and accepted by the plan to effect a division of the marital portion of the fund. The divorce attorneys at Jean M. Mahserjian, Esq., P.C. have vast experience obtaining QDROs and interfacing with plan administrators to secure a division of the funds.
Jean M. Mahserjian, Esq., is a New York family law and divorce attorney in Albany, Saratoga, and the surrounding areas. For more than 20 years, Jean has maintained her capital region law firm, located on Route 9 in Clifton Park, New York. The practice encompasses all areas of family and matrimonial law, and an online uncontested divorce service.
Our family law services cover every aspect of divorce at every stage, from contemplation to litigation, from settlement to modifications of orders. Jean M. Mahserjian, Esq., P.C. maintains low effective hourly rates for all of our legal services.
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