When you and your spouse decide to divorce, you may fall into the high-asset couple category on the basis of your pension and retirement plans alone. Such plans have become primary marital assets of most couples today.
As marital assets, Illinois law requires you and your spouse to divide your pension and retirement plans in a fair and equitable manner. This can become very complicated very quickly if one or more of the plans fall under the Employee Retirement Income Security Act of 1974.
Qualified Domestic Relations Order
If you or your spouse has such a plan, you will need a Qualified Domestic Relations Order in addition to your final divorce decree. Why? Because ERISA pension plans have specific rules and regulations attached to them. If you fail to follow these rules and regulations, you could be in for a nasty surprise when it comes time to distribute your plan’s benefits.
A QDRO solves this problem. As SmartAsset.com explains, a QDRO is a legal document drafted by your attorney that specifies how the plan’s benefits distributions occur after your divorce. Keep in mind that a normal property settlement agreement cannot serve as your QDRO. You must have a specific QDRO document to submit to the court. Once the judge approves it, he or she will either attach it to your final divorce decree or incorporate it within that decree.
To make sure that your QDRO follows all of your plan’s rules, regulations and necessary language, your wisest strategy consists of contacting your plan’s administrator to ask for a pro forma QDRO that your attorney can use as a guideline in drafting your own QDRO. Once drafted, you may also wish to send it back to the plan administrator just to make certain your attorney crossed all the necessary Ts and dotted all the necessary Is.
