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The marriage is over, so who gets the retirement plan? Like other assets, your retirement nest egg is included in marital property and therefore up for grabs in a divorce. Ex-spouses, children and other dependent may be entitled to a portion of another spouse’s 401(k) or related qualified employee retirement plan. How much depends on your state, circumstances under which the marriage ended, and various other factors.
Complicating matters further is the tax-advantaged status of qualified retirement accounts. Under typical circumstances, anything taken out before retirement can be subject to early withdrawal penalties. But divorces are anything but typical. That’s where the right paperwork can help. It’s called a QDRO, qualified domestic relations order, and if you are divorcing a spouse it’s what you need to divvy up the retirement plan assets. A QDRO is basically a document, drafted in a specific way, that recognizes an alternate payee for the assets within the account. In other words, it’s a court order that guarantees that more than one person will benefit from the retirement savings.
Artinger Law is widely recognized as the premier firm in the St. Louis metropolitan area for QDRO preparation. In addition to serving clients throughout Illinois and Missouri, Artinger Law serves as the preferred QDRO preparation firm for over 20 St. Louis area divorce firms. Let Artinger Law help you navigate this complicated process.
The QDRO Preparation Process
Client Intake – To begin the QDRO process, Artinger Law, LLC requires a completed client intake sheet. This document contains all the personal information Artinger Law, LLC will need to determine benefits and draft the QDRO. This information includes personal information about you, your former spouse, and information about your marriage.
Contact Plan Administrator – Artinger Law, LLC begins the QDRO drafting process by making contact with the administrator of the retirement plan in order to request documents needed to determine what benefits and options are able to be transferred.
Review Summary Plan Description – Artinger Law, LLC goes the extra mile and reviews the Summary Plan Description for your plan. This documents contais all the nuts and bolts for the plan and often have significant restrictions on alienation.
Draft QDRO –After reviewing the plan documents, Artinger Law, LLC drafts a proposed QDRO blending the requirements of the individual plan administrator and statutory requirements imposed by the Employee Retirement Income Security Act of 1974.
Obtain Pre-approval – After Artinger Law, LLC drafts a proposed QDRO, the document is sent to the plan administrator for review. While not required, most administrators will review a proposed QDRO and signal to the attorney who drafted the proposed QDRO that will accept the document after it is signed by the necessary parties.
Prepare Confidential Information Form – Administrators require confidential information in order to approve the QDRO. However, QDROs are court documents and are entered into the public record. Artinger Law, LLC prepares a separate confidential information form that is sent along with the signed QDRO to the administrator in order to ensure that your social security number and other confidential information does not go into the public record.
Signings – A QDRO must be signed by both parties, often in the presence of a notary public.
Obtain Judge’s Approval – After the parties sign the QDRO, but before a plan administrator will approve a QDRO, a judge must sign off on the document.
Submit QDRO for Final Approval – After the judge and both parties have signed the QDRO, Artinger Law, LLC submits the QDRO and confidential information form for final approval.
What Types of Retirement Accounts Require a Judicial Order Before Division?
- 401(k) Plans
- 403(b) Plans
- 457 Plans
- Solo 401(k) Plans
- Qualified Annuities
- Civil Service Retirement System (“CSRS”) Plans
- Federal Employees Retirement System (“FERS”) Plans
- Thrift Savings Plans (“TSPs”)
- Defined Benefit Pension Plans
- Defined Contribution Pension Plans
- Simplified Employee Pension (“SEP”) IRA
- Simple IRAs (Small Business Sponsored)
- Individual Retirement Accounts (“IRAs”)
- Roth IRAs
- Health Savings Accounts (“HSAs”)
- Non-Qualified Annuities
- Keough Plans
- Golden Parachutes