After months and possibly even years of tense negotiations or emotionally and financially draining litigation, you have your divorce Decree in hand. You are divorced. But is your divorce really FINISHED? If your divorce Decree includes a transfer of retirement accounts, then answer is probably “No.” You are not done – yet.

You're likely thinking: “Wait! What do you mean I'm not done?!”

When dividing retirement accounts, you will almost certainly need a Qualified Domestic Relations Order to complete the transfer of retirement assets. There are some exceptions to this requirement, but even those exceptions typically require a similar order to permit the transfer. But why?

The most common retirement accounts, such as 401(k) and private pension plans, are governed by the Employees Retirement Income Security Act of 1974 (more commonly referred to as “ERISA”). This law restricts your ability to access or transfer those retirement accounts – except under very specific circumstances. One of the exceptions is when the transfer of assets is pursuant to an award of marital property rights or spousal support in an action for divorce. But even then, a special type of order must be entered by the court and submitted to the Plan. ERISA refers to this type of order as a “Qualified Domestic Relations Order” – or “QDRO”.

A QDRO is an order that contains specific language necessary to complete the division of the retirement account(s) in question, while complying with ERISA. Without a QDRO, the Plan Administrator will almost certainly deny any request to transfer funds – even if you provide a copy of your divorce decree. Occasionally, a Plan Administrator may transfer funds without a QDRO in place – but BEWARE – if that happens, one of the parties is potentially in store for a very big tax bill. Other retirement plans, such as federal government retirement plans, military retirement plans, railroad retirement, as well as some state and local government plans may not be subject to ERISA specifically, but will require a similar (and very specific) retirement division order.

So, do you really need a QDRO? If you have to divide retirement accounts as part of your divorce decree, then the answer is almost certainly, “YES”. At SimpleQDRO, we make that process simple: you provide us with the necessary information and we provide the QDRO (or equivalent order) for your particular plan, along with step-by-step instructions for getting your QDRO approved by the Plan and executed by the court. In the unlikely event that your QDRO is not approved, SimpleQDRO will make any necessary revisions at no cost to you until the QDRO is accepted. We cover all 50 states and provide all of this for only $399.00. No hidden fees. No gimmicks.

If you have questions, or would like to get started, visit us at SimpleQDRO.com or feel free to contact us at [email protected]. We want to help make this process as simple as possible.