How Does a QDRO Work in Divorce?

Splitting up assets during a divorce can be a challenge, especially when the assets fluctuate and are tied to employment or other programs. Retirement accounts can be especially difficult to split up, as they involve complex financial and legal structures.
A QDRO is often used during a divorce to split up retirement assets. Here’s what you need to know about how QDROs function during a divorce.

What Is a QDRO?

QDRO stands for Qualified Domestic Relations Order. A QDRO is a decree or an order issued by a judge that directs a financial administrator to divide certain assets, primarily retirement accounts.

During a divorce, retirement accounts cannot be split automatically and require the use of a QDRO. QDROs can also be used to distribute funds for child support from a retirement account. A QDRO can be used for a variety of financial accounts, including pensions, 401(k) accounts, and 403(b) plans.

How is a QDRO Used During a Divorce?

After marriage, assets that accrue in a retirement plan are considered community property. The spouse controlling the account might own the funds that were present before the marriage, but if the account grows during the marriage, the other spouse will receive some of the assets in a divorce.

A judge will issue a QDRO during or after the divorce proceedings, according to the settlement that was reached. Without a QDRO, some funds will be inaccessible to the spouse who has a legal right to them. A QDRO might be needed to distribute alimony or child support payments, in addition to splitting up assets.

How Are Retirement Accounts Divided?

Each state has its own guidelines for splitting up property and financial accounts during a divorce. Some states have limitations on the distribution of property based on the length of the marriage and other factors. Others divide property equally.

For financial accounts, there might be limitations on withdrawals during the divorce proceedings to prevent one spouse from taking money out of the account before the assets are divided. When you file for a divorce, it’s important to take note of any limitations that might apply so that you don’t accidentally violate any orders regarding your assets.

Do You Need Legal Representation in a Divorce?

Although there are some divorces that are extremely simple and easy to resolve, most are more complicated. It’s difficult to separate the finances and responsibilities of a couple and it takes specialized knowledge to navigate the process. Having legal representation is important for protecting your interests during the divorce.

To learn more about QDROs and property division in Texas, give our San Antonio office a call at (210) 953-7486. Our experienced divorce attorney can help you understand your rights and responsibilities during the divorce process.