Dividing retirement accounts for a divorce is incredibly important. Retirement accounts and pensions are property subject to division. There are two main ways to proceed.
First, settle that the person gets to keep their retirement account. Settling a case allows people to do things that a court would not order and parties can trade things. For example, maybe each party has an account worth about the same so each person just keeps the one in their name. Maybe there is a trade for other assets, or one person taking on a bunch of debt. Maybe the parties can agree on a cash equalizing payment.
Second, divide the account, which usually involves doing a QDRO (pronounced “quad-dro”). QDRO is shorthand for Qualified Domestic Relations Order. If it is a government retirement plan, we just call those DROs. A QDRO is a special kind of court order separate from the judgment. Sometimes they specify division based on a time rule to make the payout proportionate for the community property share. Sometimes they specify a firm dollar amount agreed upon by the parties or ordered by the Court. The particular options available depend on the type of plan, agreement of the parties, and/or Court order.
Attorney James Moore helps clients make decisions on how to deal with retirement accounts in divorce. Unlike most family law attorneys, he can also prepare QDROs in-house. He also gets hired as a joint-neutral QDRO preparer, and does so through his website: www.sierraqdros.com. Whether you hire James or not, it is important to get legal advice for how to properly handle retirement accounts in divorce. Even when there is an agreement to divide a retirement account with a QDRO, all too often people forget about it or the person’s attorney withdraws and does not help get the QDRO done. With so much money at stake, it is important not to forget about tying up that loose end.