Qualified domestic relations order
A QDRO is a judicial order in the United States, entered as part of a property division in a divorce or legal separation that splits a retirement plan or pension plan by recognizing joint marital ownership interests in the plan, specifically the former spouse's interest in that spouse's share of the asset.
A QDRO's recognition of spousal ownership interest in a plan participant's (employee's) pension plan awards a portion of the plan participant's benefit to an alternate payee. An alternate payee must be a spouse, former spouse, child or other dependent of the plan participant. A QDRO may also be entered for spousal support or child support.
A QDRO is necessary for the distribution of certain plans, including but not limited to the ones below:
Employee stock ownership
Corporate/business pensions or defined benefits
Money purchase plans
Federal laws restrict certain plans from paying anyone other than the original owner unless a court orders it via a QDRO. Additionally, QDROs help prevent early withdrawal penalties and tax consequences.
Contact Long & Vernon LLP today to discuss your QDRO options. 619-485-2900