When going through divorce, many aspects of your life and your soon-to-be ex-spouse’s life will need assessing. Because you will essentially split two shared lives into two individual lives, many minute decisions will need making. In particular, you may have concerns regarding property division and ensuring that you receive your rightful share of the assets.
In order to make sure that you understand to what you may be entitled, you may want to start by reviewing your assets. Once you know what property counts as marital and what counts as separate, you could gain a better idea as to what could remain yours or come into your sole possession after the legal proceedings. You may want to pay particular attention to retirement accounts, as you could easily miss out on a share of funds if you do not take the proper steps.
Dividing a 401(k)
When it comes to dividing retirement accounts, you may think that they are not on the table. However, these accounts could go through division proceedings unless you and the other party decide during the legal process to leave each to his or her own or if you created a prenuptial agreement that indicated that any 401(k) accounts remain separate property.
If the funds in a 401(k) account need to go through division, extra steps need taking. Many laws work to protect retirement funds for the retiree, and because of these regulations, a specific document known as a qualified domestic relations order will need creating and submitting before retirement funds can go to another person.
Purpose of a QDRO
When creating a QDRO, you — as the recipient of the other party’s retirement funds — will become an alternate payee. This means you obtain the right to a portion of the funds in the 401(k) account. The document will also need to include personal information such as your name, your ex-spouse’s name and mailing addresses for each of you. The QDRO should also indicate the amount or percentage of the funds you should receive.
Because a QDRO is a legal document, you can obtain a draft from your legal counsel or other qualified attorney. Once drafted, the document will be presented to the judge in charge of your case for approval and then submitted to the administrator of the retirement account involved in the division for approval. A chance does exist that the administrator could reject the QDRO, but he or she need to provide a valid reason for rejection and instructions on how to correct any issues.
Learning more about QDROs
If you believe you may need a QDRO or want to find out more information on this or other documents involved in property division proceedings, you may want to utilize local Clayton legal resources.