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At Paul S. Kowal, P.C., you can count on our Macomb County QDRO lawyer to help you create a divorce settlement that divides retirement plans. With over 30 years of legal experience, our attorney has much experience in resolving this area of law. He will work directly with you to ensure you complete and submit the proper paperwork and litigate your best interests should things go amiss.
Contact our office today at (586) 333-3446 for your complimentary consultation. We also serve residents of Clinton Township, Sterling Heights,, Macomb Township, Shelby Township, Utica, and the surrounding areas.
What Is a Qualified Domestic Relations Order (QDRO)?
A QDRO is a legal order that allows one spouse to take a share of the other’s retirement or pension plan after they are divorced. A QDRO can also be assigned to other dependents such as children. The QDRO will identify the retirement account as well as the percentage that can be paid to former spouses and dependents.
A QDRO is the most popular order utilized to divide a pension, similar orders are used to divide pensions where the employer is a governmental entity. These other orders are called EDRO’s (Eligible Domestic Relations Order); Military Qualifying Court Orders; and Court Orders Acceptable for Processing. Although we are speaking primarily of QDRO’s in this section, much of the information here also applies to these other governmental agency domestic relations orders.
When does one need a QDRO?
There are different types of pension benefits. One type is an IRA account. In most cases, an IRA can be divided through the language in the Divorce Judgment without the need for a QDRO. There are exceptions, however.
A second type of benefit is a defined benefit retirement plan. These are the traditional pensions, where a person receives a defined monthly benefit from the retirement plan. For example, one might receive $2000 per month from the age of 65 until their death. Defined benefit plans are generally always divided by a QDRO.
A third benefit type is a defined contribution retirement plan. These plans involve contributions by the employer and/or the employee to an investment account. Examples include 401k plans, 403b plans, Thrift Savings Plans and some deferred compensation plans. Generally, a QDRO is used to divide these plans.
Who Prepares the QDRO to be submitted to the Pension Administrator?
Although a QDRO can be prepared by your lawyer, lawyers like to use QDRO companies. Since QDRO companies prepare orders for hundreds of attorneys, they are more familiar with pension rules of the various employers, governmental agencies and unions who provide pension plans to their employees. In most cases a QDRO company can draft the order inexpensively and provide guidance to getting the order approved by the pension administrators of the plans.
You still need a lawyer who is knowledgeable about pensions because the lawyer will be directing the QDRO company with the language in the divorce judgment. Under Michigan law, the various benefits under a specific plan are to be divided equally, unless the divorce judgment provides otherwise. Further, the language used may determine whether the benefit awarded to a spouse will return to them should their spouse pre-decease them. Therefore, you need a lawyer who understands pensions to include the right language in your Divorce Judgment.
Your attorney’s role, concerning pension benefits, while the Divorce is pending
While your divorce is pending, your attorney will help you identify all the retirement benefits in which you and your spouse have an interest. You will have to provide statements for the various benefits. If you do not know your spouse’s benefits or have access to their statements, your attorney can obtain these from the other side or through discovery. Your attorney can also obtain information from the plan administrator of each entity about the benefit and may even obtain a copy or synopsis of the retirement plan.
For a QDRO to be qualified, it must include the names and mailing addresses of the holder, former spouse, and dependents who have been assigned a share of the account. Additionally, the QDRO must include all the retirement plans and pensions that are applicable to the order. The percentage amount to be paid to each receiving party and the duration of the payment must be listed on the QDRO as well.
How to Submit a QDRO
After the QDRO is prepared, the order needs to be submitted to the court for the Judge to approve. Although a QDRO company will draft your order, they will not submit it to the court nor forward it to the pension administrator. Generally, this is done by your attorney.
Contact Our Knowledgeable Law Firm Today
An important part of divorce can be the division of marital assets and retirement benefits. You should always consult with a qualified attorney who can provide you with sound legal advice and guidance so you ensure you receive the amount you deserve.
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