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The use of qualified domestic relations orders in a divorce

On Behalf of | Apr 9, 2015 | Uncategorized

Qualified domestic relations orders play an important role in many Arizona divorces, but most divorcing couples have little idea what they are, at least until they are deep into the case. Generally speaking, a QDRO is a type of domestic relations order that deals with retirement plan benefits.

A domestic relations order is an order, judgment or decree made in certain types of family law proceedings.Although normally issued by a court, a domestic relations order may be made by any instrumentality or state agency that has been granted the proper authority. The parties affected by a QDRO are referred to as the participant and the alternate payee or payees. Only a spouse, former spouse or dependent of the participant may be named an alternate payee.

To meet the requirements of the Employee Retirement Income Security Act, a QDRO must contain the names of all retirement plans to which the order applies, the names and mailing addresses of each alternate payee and the participant, the number of payments or the duration of the order and the percentage of the benefit or dollar amount that is to be paid to each alternate payee. A QDRO need not be issued as a separate order, decree or judgment, but instead it may be included as part of a property settlement or divorce decree. Alternate payees are not eligible to receive benefits not provided by the relevant retirement plan. The QDRO may appoint a trustee or guardian to receive benefits for an alternate payee who is legally incompetent or a minor.

A single QDRO may address rights and name alternate payees for multiple retirement plans. Individuals who will be needing a QDRO as part of their divorce proceedings may wish to consult an attorney for assistance with the drafting of the document to ensure that it is legally binding.