Qualified Domestic Relations Orders (QDRO)
The alternative would be to actually divide the retirement benefits themselves. In most instances, but not all, this is possible. For those retirement benefit plans that are made available through private organizations (i.e., employers, etc.), this is as a result of the Retirement Equity Act of 1984, and it’s result, the Qualified Domestic Relations Orders, who provide the legal means by which to divide these assets. In short, the employment of a QDRO essentially assigns the non-employee spouse a portion of the retirement benefit as a "alternate payee". In many cases, this is the most pragmatic and simplest solution to the retirement benefit question.
For those retirement benefit plans which are not sponsored by the private sector, a QDRO may not be employed. These would include the U.S. Civil Service Retirement System, Federal Employees Retirement System, military pensions, as well as many local and state government plans. In these instances, oftentimes these plans can be divided by court order. However, each different government pension has its own type of specialized court which will make the final determinations. The same can be said for state and local government pensions. Another significant situation in which QDROs are not eligible would be Individual Retirement Accounts (IRAs). However, IRAs are easily divided or able to be transferred to separate accounts without the need for a QDRO.
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DATE OF SEPARATION – Depending upon the laws of the state of residence, the Date of Separation – called the DOS – has a profound impact on the eventual division and distribution of property and debt, including credit, pension benefits, and other marital assets. As of the DOS, the separated spouses are now in limbo legally and financially and remain so until the actual Date of Divorce. A great deal of money may be at stake. For example, one spouse may share responsibility for any debts incurred by the other; the value of a retirement plan or other marital asset, such as residential property, may fluctuate, often by thousands of dollars.
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