Divorce and Retirement Plans: QDROs in California

Retirement or pension plans often stand as one of the most significant assets individuals accumulate over their working years. However, in the event of a divorce in California, these assets can become a point of contention between spouses. This is where a Qualified Domestic Relations Order (QDRO) comes into play.

What is a QDRO?

A QDRO, or Qualified Domestic Relations Order, is a court order that divides retirement or pension plan assets between divorcing spouses. It establishes the alternate payee's right to receive a portion of the retirement benefits earned by the plan participant.

When is a QDRO Used?

A QDRO is utilized when dividing retirement benefits during a divorce or legal separation. It applies to various types of retirement plans, including 401(k)s, pension plans, 403(b)s, and governmental plans, among others.

Without a QDRO, the retirement plan may not be informed about the divorce or the obligation to allocate a portion of the plan to a former spouse. Consequently, the retirement plan might distribute all funds or benefits to the plan participant, neglecting the former spouse's entitlement. What’s worse, if the participating spouse passes away before the QDRO is finalized, the former spouse may be unable to claim their share of the retirement plan.

How Does a QDRO Work?

Once a divorce decree or separation agreement is finalized, a QDRO is drafted to specify how retirement benefits will be divided. The QDRO must be submitted to the retirement plan administrator for approval. Once approved, the plan administrator implements the division of benefits according to the terms outlined in the QDRO. 

After your QDRO is approved, you can receive payments directly from the retirement or pension plan instead of through your ex-spouse. As the "alternate payee," you become the direct recipient of your share of the asset. However, you must wait for the plan's benefits to mature before receiving a payout.

How to File for a QDRO in California

Before initiating the process for a QDRO, ensure you have a legal document establishing your rights in a domestic scenario. This could be a judgment, decree, settlement agreement, or order approved by the court.

When filing for a QDRO, include the following information:

• Names and addresses of the plan participant and the alternate payee,
• The specified amount or percentage of benefits allocated to the alternate payee,
• The duration or number of payments to be made, and
• Identification of all the retirement and pension plans covered by the order.

QDRO FAQs:

• Who is Responsible for Filing a QDRO After Divorce?

The obligation to file a QDRO rests with the recipient who is entitled to a portion of the plan. In other words, if a spouse is receiving a share of the plan's assets, they must file a QDRO to access their benefits.

• Can I Get Half of My Husband's Pension in a Divorce in California? 

Yes, a QDRO can specify an equal division of retirement benefits between spouses. Usually, assets and benefits accrued during the marriage are divided equally. However, if your spouse had funds in the account before the marriage, you may not be entitled to a share of those pre-marriage funds or benefits.

• Is There a Time Limit to Filing for QDRO? 

While there is no specific time limit for filing a QDRO, it is advisable to initiate the process promptly after finalizing the divorce decree. 

Filing for a QDRO sooner rather than later safeguards your rights. Delaying filing could pose risks, such as the retirement plan exhausting its benefits if your spouse passes away before the QDRO is filed. For instance, a subsequent spouse might receive all the plan's surviving spouse benefits before your QDRO is processed.

• Do I Need a Lawyer to File a QDRO? 

Given the complexity and importance of QDROs, it is highly recommended to seek the guidance of a knowledgeable California divorce attorney to ensure compliance with legal requirements and protect your interests.

A QDRO isn't just paperwork—it's your legal entitlement. It's crucial to have a divorce attorney who can advocate for you when drafting the QDRO to ensure you receive all the benefits you're entitled to. Your lawyer will ensure that the benefits allocated to you in the QDRO accurately represent your fair share, so you don't miss out on any entitlements.

At Anthoor Law Group, we are dedicated to providing you with the guidance and support you need during this challenging time. Contact us today to learn more about how we can assist you with your QDRO and other divorce-related matters.