9 Reasons Not to Delay in Obtaining Your QDRO
by Clifford J. Petroske, Esq.
November 11, 2012
The resolution of a divorce action, whether by trial or settlement, can take months or sometimes years. Understandably, after receiving the judgment of divorce, many people are less than eager to seek yet another order from the Court. However, if you are entitled to share in your (former) spouse’s retirement benefits you will have to get a separate order at the conclusion of the divorce called a Qualified Domestic Relations Order (QDRO)(or just plain Domestic Relations Order if it’s a government plan) before you can receive anything from the pension or retirement account.
The judgment of divorce by itself does nothing to get you paid. Even if your settlement agreement, trial decision, and/or Judgment of Divorce states that a pension or 401k is to be divided between the parties, most pension administrators will not actually split the pension without a QDRO. The QDRO is a special order that identifies the exact name of the plan, the Participant (also sometimes referred to as the Member or employee spouse), the Alternate Payee (also sometimes referred to as the Former Spouse or non-employee spouse), the exact amount or percentage to be awarded, or a formula to be used to calculate the award, and other terms required by law.
Unappealing as it may seem, there are numerous reasons why you do not want to wait to apply for a QDRO.
In practice, the task of submitting a proposed QDRO to the Court usually falls on the non-employee spouse, since he/she is the party who benefits from the QDRO. However, sometimes it makes sense for the employee spouse to take the initiative. For example, if you want to take a loan from your 401k and are restrained from doing so until your former spouse receives his/her share of the account, you may want to have the award paid out quickly. In the case of a defined benefit pension, it is best to have the QDRO on file well before you submit your retirement application, to avoid any efforts by your former spouse to delay your retirement while he/she tries to obtain a last minute QDRO from the Court.
The bottom line is that you may think you are giving yourself a much needed break at the end of your divorce, both financially and emotionally, by putting off the task of obtaining a QDRO. However, if you procrastinate on this important task, you may find yourself involved in costly litigation with your former spouse again one day, perhaps even ten or twenty years in the future. It is best to get it out of the way now, so you can move forward in your post-divorce life with one less thing to worry about.