How to include retirement accounts in the division of property

On Behalf of | Aug 3, 2020 | property division | 0 comments

Kentucky residents negotiating the division of property during a divorce might also look at their spouses’ retirement accounts and how payments from these accounts should be included in the divorce settlement. While many people forget to include retirement accounts in the negotiations, especially when retirement seems to be far into the future, they can be among the most valuable assets in some divorces.

However, in order to receive payments from an ex-spouse’s retirement account, a Qualified Domestic Relations Order (QDRO), must be issued by the court and accepted by the retirement plan. With a QDRO, a person might receive payments once the retirement plan participant retires or survivor benefits if the individual dies.

It is always best to address retirement accounts during the property division phase of the divorce and seek a QDRO during the dissolution of the marriage. However, it is possible, although difficult, to acquire a QDRO long after a divorce is finalized. However, if the retirement account was not included in any way during the original settlement, getting a QDRO will include the time-consuming process of reopening the divorce case. If a QDRO is issued after the participant has already begun receiving payments, the order will only apply to future payments.

A QDRO is the name for the type of order accepted by retirement plans in nonprofit and private organizations. Similar orders in other types of organizations can have different names. For example, Court Order Acceptable for Processing (COAP), is the name used for the retirement plans of employees of the federal government.

There are many areas to focus on during the divorce negotiations. Guidance from a family law attorney may be helpful during the divorce process since he or she might come up with different ways to handle property division and provide ideas for negotiations with the client’s ex-spouse.

FindLaw Network