In every divorce, there is a division of property and one of their most valuable assets may be a spouse’s pension or retirement account. Federal law, however, protects retirement accounts from the division between spouses partly because the federal government wants to make sure all taxes are collected. To ensure Uncle Sam isn’t cheated, most retirement accounts require a Qualified Domestic Relations Order or QDRO (pronounced “quad row”) to avoid income taxes when the account is divided pursuant to a divorce.
A QDRO allows a court to designate a portion of a retirement plan belonging to one spouse to the other spouse. Under a QDRO, each spouse then would be entitled to his or her share of the plan’s value when he or she reaches retirement age. A QDRO can assign either a certain percentage of the value of an account to the other spouse, or assign a specific dollar value to the spouse. It also may allow one spouse to create a new retirement account using his or her portion without incurring federal income taxes.
A QDRO is typically a very complex legal document that the Plan Administrator for the retirement plan must approve before disbursing any portion of the plan to the other spouse upon divorce. Plan Administrators for different companies often require very specific language and provisions in these documents before they will accept them. Without a QDRO approved by the Plan Administrator, you will not be able to access your share of your ex-spouse’s retirement account, even if it says so in your divorce decree.
The divorce attorneys at Pacific Northwest Family Law know how to handle all aspects of Washington divorce cases, including issues pertaining to QDROs. No matter how complex your case might be, we are here to help and give you the advice that you need. Contact our office or call us at 1-509-581-4342 to schedule an appointment with one of our experienced divorce lawyers today.