Thursday, September 11, 2014

Qualified Domestic Relations Orders (QDRO)

A Qualified Domestic Relations Order (QDRO) is an order issued by a state authority or court, which provides funds from the retirement account of a divorcing individual to his or her spouse. This is done to pay alimony or child support payments, or to split up the marital property.

Requirements for a QDRO

For a Qualified Domestic Relations Order to be issued by the court, the court must have information:

  • on the total amount of payments to be made
  • on the periods for which payments must be made
  • on the names and addresses of the divorcing individuals
  • about the retirement account out of which the QDRO will be set up

Features of a QDRO

A Qualified Domestic Relations Order has the following features

  • A QDRO does not affect the basic rules of a retirement account. For example, funds cannot be withdrawn earlier than what the retirement plan allows.
  • The benefits to be received under a Qualified Domestic Relations Order are taxable, even if they are being paid in place of child support payments, which are usually not taxable.
  • The recipient of the benefits can defer the tax payments by investing the amount in an Individual Retirement account.
  • Although used mostly in divorce cases, a Qualified Domestic Relations Order may also be set up for a legal separation case.
  • The account to be used must be a retirement account.
  • Previous alimony and child support payments can be paid with a Qualified Domestic Relations Order.

There are a number of other factors concerning QDROs that a person going through a divorce should consider before proceeding with his or her case.

If you or someone you know is considering a divorce, and would like to find out more information about QDROs and your legal rights, contact the passionate Oceanside divorce lawyers of Fischer & Van Thiel, LLP, today. James Witherspoon
Article Source: http://EzineArticles.com/?expert=James_Witherspoon

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