Though you may have grown up with fairy tales, not all marriages end with a happily ever after. If you and your spouse are getting divorced, you may not know what to expect or how to navigate this complex legal matter. For example, you may have heard that you should get a QDRO, but aren’t exactly sure what is it or what it does. If you’re not sure whether or not you need a QDRO for a divorce, you’ll want to keep reading to learn more about this process and how a Los Angeles divorce attorney can help you through this process.
What Is a QDRO?
A QDRO, or Qualified Domestic Relations Order, is a court order that provides a potion of one spouse’s retirement plan to the other during a divorce. In California, a couple’s marital property is distributed equally under Community Property Laws. However, this does not extend to retirement plans, which is where a QDRO can come in handy.
QDROs include any employer-sponsored retirement plans but do not include an individual retirement account, or IRA. Whatever is included in an IRA is considered marital property. Similarly, you may not need a QDRO if your spouse works for the government, as this requires a different kind of document. One of the significant benefits of a QDRO is that it allows for the withdrawal of funds from an employer-sponsored retirement account without the tax penalties that would usually occur.
For example, if Mary has $20,000 in her retirement plan before getting married to John. Throughout the course of their 3-year marriage, Marry accumulates an additional $60,000 in the 401k. When John and Mary divorce, and he submits a QDRO, it is likely that Mary will keep the initial $20,000 but that the $60,000 accumulated during the marriage will be split evenly between both spouses.
It is important to note that the $30,000 John receives from his ex-wife’s 401k must be placed in a retirement account. If they are not, he will incur a 10% tax on the funds.
Can a Riverside County, California Attorney Help Me Determine if I Need a QDRO for a Divorce?
When you are going through a divorce, you will likely hear many different perspectives and voices telling you what you should and should not do. However, the most important thing to keep in mind is that you should only listen to the advice of a qualified and experienced attorney.
QDROs can be complex and challenging to understand, as they are not always necessary in all situations. As a result, you’ll need to ensure you have an experienced attorney ready to fight for you. At the Zitser Family Law Group, we understand how confusing QDROs can be. Luckily, our dedicated legal team is well-versed in this matter, meaning we can help you through this time. Contact us today to learn more about how we can help you.