Who Should Be Responsible For QDRO Preparation?

In most divorces where retirement accounts must be divided, the typical scenario is that the division isn’t finalized until the very end. While understandable, it often creates an unintended consequence – the Qualified Domestic Relations Order (QDRO) is treated as an after-thought.

After months or years of fighting it out, neither side has the time or energy to focus on this key legal document. And since it will cost money and additional legal fees to have the QDRO prepared, reviewed and finalized, often neither side really wants to take responsibility for it, either.

The responsibility usually falls to the alternate payee to sort out this last piece of the puzzle. However, it is a mistake for the plan participant to simply wash his or her hands of the process. But, because a QDRO can be drafted to favor one side or the other – whether intentionally or not – both sides and their attorneys should take an active role in approving the final QDRO.

This means that neither side should just walk away and leave it to the other side to figure out. Because retirement account distributions often happen months, years or even decades after the divorce is final, discovering that things happened not like you expected them to can be difficult or even impossible to fix later on.

To learn more about QDROs or the many related services we provide, please visit our website.