For those in Wheat Ridge and Jefferson County who are close to retirement or already retired and getting a divorce, a concern that often arises is a pension or retirement benefits. For many couples, the pension or retirement account was accumulated and earned during the marriage, so it can be a part of the divorce settlement. In order for a 401k, IRA, or other retirement account to be divided, one spouse must specifically request a share during the divorce process. This can occur even if the other party has not yet retired and is not collecting any benefits. If one party requests a portion of the retirement benefits, then a Qualified Domestic Relations Order (QDRO) is necessary.
Qualified Domestic Relations Order? An Arvada Divorce Lawyer Explains
A Qualified Domestic Relations Order (QDRO) is a document drawn up by the court and signed by the judge that outlines the division of retirement benefits after a divorce. A QDRO requires that a pension plan administrator oversees the division that was agreed upon or ordered through the divorce proceedings. There are many rules and guidelines that govern retirement benefits and the division of such assets, so it’s important that you have an experienced Wheat Ridge divorce attorney to help guide you in this process and make sure that your QDRO follows all the guidelines and meets all the criteria. You don’t want issues later down the line or for your divorce to be dragged out to work out these issues.
Retirement Division During Divorce: Some Important Things to Consider
After the QDRO is in place and the settlement has been determined, the spouse receiving the benefits is entitled to the same rights and opportunities as the retirement plan owner. This means they may be able to withdraw their portion early and set up cost of living arrangements. In a 401k situation, the receiving spouse may be able to continue to invest in their portion, though the monies may have to be moved to a different plan to allow that investment. Also, the receiving spouse will be able to begin drawing on the account as soon as the account owner begins withdrawing.