Recently divorced couples know how much paperwork can go into filing for a legal separation in the states.
Filing to separate the assets of a retirement or pension plan is often necessary, yet lengthier steps. The process can become complicated quickly, especially in areas like Washington state that put extra hoops to jump through when filing after a divorce.
Former spouses and dependents should understand what a QDRO is and how to file that order, if necessary.
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What is a QDRO?
A qualified domestic relations order, or QDRO, is how divorcing couples split their assets.
A QDRO is a legal document that creates or recognizes the former spouse’s right to receive assets from an employer-sponsored retirement plan. QRDOs only apply for pension or benefit plans subject to the federal law that governs private-sector pensions, or the Employee Retirement Income Security Act (ERISA).
Usually, a QDRO will grant the former spouse about 50% of the retirement plan’s assets. Former spouses can only receive benefits from the retirement plan if a QDRO is filed with a state court alongside or after a divorce decree. Retirement benefits can only be split among spouses if the plan accepts the QDRO.
The spouse receiving a portion of the retirement plan is known as the “alternate payee,” and the employee earning the benefit is the “participant.” QDROs organize how often and how much of the benefits will be granted to the alternate payee following a divorce with the participant or the participant’s death.
After the QDRO is accepted and in effect, the former spouse will be legally eligible to receive the retirement plan’s assets. Each spouse is responsible for paying individual taxes on the assets distributed.
Who Should Be Submitting a QDRO?
Submitting a QDRO is a tricky process that requires an understanding of how domestic relations orders get handled in a court setting. A domestic relations order is only qualified once the plan in question has accepted it.
When filing your divorce decree, inform your family lawyer that there are retirement plan benefits at stake. Divorce decrees may mention retirement plan payouts, but a QDRO must be on file for the plan to include an alternate payee.
Because QDROs can deal with child support, alimony rights, or marital property rights, alternate payees can be either a former spouse, a child, or any other dependant of the participant.
Whatever the situation is, your lawyer should submit a completed QDRO to the court on your behalf. Lawyers will understand the details and the order in which to present the information regarding your QDRO to a court.
How Do I File a QDRO With The Court In Washington State?
Filing a QDRO in Washington state is a more complicated process than it may seem.
The QDRO must contain specific language required by the retirement plan administrator and must also be filed alongside the divorce decree. However, there have been multiple times that the QDRO does not get recognized during the divorce proceedings, so the order must be filed again afterward.
Time constraints, language requirements, and delivery methods are all essential details that must get considered while filing a QDRO. The order must be filed in a way that satisfies both federal and state law requirements, which is why it is so important to communicate with a lawyer throughout the process.
The necessary steps to get started with the QDRO drafting process include:
- Speaking with your divorce lawyer about the retirement plan assets at stake
- Drafting and agreeing on QDRO details, including asset amounts and frequency
- Filing the QDRO to the appropriate state court
QDRO Washington state filing processes are different than other states. It’s essential to be aware of the state and federal requirements and the requirements outlined in the plan itself.
Speak With Your Family Lawyer
Although you can get a QDRO form from almost anywhere on the internet, you’ll need help from an expert to complete it. The family lawyer you hire to deal with your divorce matters should also help you file a QDRO.
However, a QDRO Washington state specialist may tell you that many divorce lawyers opt to work with other lawyers who know how federal law governs retirement and pensions. Professionals trained in understanding private retirement plans can see through the jargon in the retirement plan requirements.
When it comes to filing a QDRO, accuracy and specificity is critical.
Before you begin drafting the QDRO, you should provide your lawyer with some information about your situation. At the very least, your lawyer will need current addresses for the participant and alternate payee and information about the retirement or pension plans in question.
Each plan will frequently have specific language and requirements that must be met to have an accepted and recognized QDRO. Professionals trained in understanding private retirement plans can see through the jargon included in the retirement plan requirements.
If a QDRO gets filed incorrectly or too late, payments will not be recognized or distributed to the alternate payee.
Draft & Agree on QDRO
Drafting the QDRO will be the lengthiest part of your QDRO Washington state filing process. With more than 500,000 private retirement plans in the U.S., there is a long list of possibilities of what your QDRO must include, according to that specific plan.
Each plan requires its QDRO, which can be difficult for former spouses with multiple combined pension and retirement plans. It’s essential to pay attention to the necessary details in each QDRO so the court will accept each order individually.
No matter how many details vary from plan to plan, each QDRO must include some of the same information. It must be decided how much of the benefit, whether by dollar amount or percentage, will be paid out to the alternate payee from the retirement plan.
You must also consider and include how many payments will go to the alternate payee and in which time period those payments will be delivered. These specifications must be agreed upon by both parties before the form gets filed.
Once you have agreed upon and read over the details included in the QDRO, you are ready to submit the form to the Washington state court.
The logistics of having your form appear before a judge will require some work on your lawyer’s part. Because Washington state has particular requirements, refer to your lawyer’s guidance for step-by-step instructions on filing the QDRO.
Once your form is submitted, you should hear back about its acceptance or rejection within a timely period.
If the form is accepted, the alternate payee can expect to begin receiving a portion of the assets on the predetermined date.
If the form gets rejected, there should be an explanation for the rejection included in that communication. The rejection letter will consist of information about improving the QDRO so the plan can accept it if it gets refiled.
The process of understanding, drafting, and filing a QDRO can be an overwhelming process for recently divorced spouses. However, stress is necessary to endure if you hope to receive a portion of the participant’s assets.
Refer to our guide and information about QDROs to ensure your order will be accepted by the Washington state courts the first time it’s filed.