How Long After a Divorce Can You File a QDRO?

In a perfect world, you would file a QDRO, or qualified domestic relations order, as soon as you and your former partner agree on the basics of your divorce proceedings and settlement. There’s no limit on how long after the divorce you can file a QDRO, but timeliness is ideal.

Whether you are facing a divorce or have recently divorced, timing is everything. But is there a time limit to file a QDRO? While there is no set limit for filing a qualified domestic relations order, or QDRO, following a divorce, it is prudent to prepare it for submission with the divorce agreement to reduce delays. 

If there’s no rule, how long after a divorce can you file a QDRO? Whenever either party prefers’ but the more time that passes, the more paperwork is necessary and the greater the challenges become in finalizing your divorce agreement. 

“The Passage of Time” by ToniVC is licensed under CC BY-NC-ND 2.0

Why Former Spouses Drag Their Feet on Pension QDROs

Unlike pre-tax retirement plans, like a 401k or 403b, pension payments for a former spouse aren’t paid for years or even decades after a divorce. The fact that these benefits won’t arrive until much farther into the future reduces the pressure of filing a QDRO. 

Some former spouses won’t feel the heat, even if their ex-partner has their attorney reach out and nudge them toward completing a QDRO. Without a response, the attorney may not be driven to push harder. 

Is There a Time Limit To File a QDRO?

There is no restriction under Washington law on filing a qualified domestic relations order following a divorce. Waiting to file, however, is a major mistake as it can lead to more significant problems. 

But can a QDRO be filed after a divorce? Although the answer is yes, it is best to apply the QDRO to the divorce agreement. The longer you wait, the trickier the process can become.

For example, an already-divorced spouse may realize their ex is approaching retirement age. But without a QDRO, they won’t receive any pension payments that they may have been expecting. 

The good news is that the courts are accustomed to resolving such cases many years post-divorce. In most situations, the right paperwork can fix everything.

Although there is typically no time limit for the review and issue of the QDRO by the Probate and Family Court, this is not always the case. Especially if a participant passes away before the QDRO is filed, further delays can result, and it may be impossible to amend the estate at that point.

Reasons Not to Delay in Obtaining Your QDRO

What happens if a QDRO is not filed? There are many possibilities, and not all of them are positive.

1. The Participant May Retire

Suppose the participating spouse is close to retiring when the divorce proceedings begin and there is not a QDRO on file. In that case, the participating spouse will begin receiving benefit payments at retirement. The non-participating partner could not be entitled to claim its share retroactively.

If the non-participant spouse attempts to enforce a pension claim retroactively, it may be expensive. The participant’s pension may have an option to designate a recipient in case of their death. Without a QDRO on file, nothing is stopping them from selecting someone other than the ex-spouse. This designation may be impossible to reverse. 

2. The Participant May Die Before Retirement

If the participant spouse dies before retirement, the other spouse risks missing the pre-retirement death advantage if there is no QDRO in the records prior to the participant’s passing. 

3. The Participant May Borrow Against The Plan

If the participant spouse is inclined to, they can borrow against their retirement benefits, affecting the non-employee spouse’s interest. The participant spouse can not borrow against the plan with a QDRO on file until after the ex-spouse is paid out.

4. The Participant May Move

It is required of the party who files a QDRO to the court to notify the other party. If several years have gone by and the QDRO applicant cannot find their former spouse, the process will be delayed.

5. Can I Withdraw Money From A QDRO?

Can a QDRO be amended? Whether or not your QDRO can be amended depends on the divorce agreements. Most divorcing couples want to know how to divide their retirement assets without tax penalties. Couples use their QDRO to transfer the money if they are 59 ½ or younger with a 10% early withdrawal penalty.

If a 401k or another type of deferred account has been liquidated by the participant before entering the QDRO, then the document doesn’t apply. The other spouse must take legal action to obtain a court judgment on the amount they lost.

However, such a scenario can involve an intensive litigation process  —  and more legal expenses. Plus, if the participant already spent the funds, their former spouse may be out of luck.

6.Can Money From A QDRO Be Received Immediately?

It depends on the type of plan involved, but some QDRO cash payments can be granted immediately. 401(k), 403(b) and 457 Plans, IRA’s, ESOP’s and Thrift Savings Plans allow immediate cash distribution. Some pensions and military/federal service plans only allow monthly payments—not lump sums. Any single QDRO is not allowed to overwrite its initial terms.

7. The Participant May Transfer Funds 

Other issues can occur if the account is not liquidated but instead has been transferred to another financial institution. For example, the transfer (or rollover) cannot be acknowledged until the non-employee partner has obtained a QDRO for the first account (the one that no longer holds the funds).

Then there’s the fact that non-employee shares in retirement accounts commonly tally up the interest and dividends starting at the date of the original divorce judgment or settlement. But because the funds changed hands in the midst of the legal proceedings, the current financial institution may not have the appropriate documentation to reflect the returns and dividends from the original date.

A manual review of records (if they’re available) can take a lot of time and resources. Plus, an uncooperative participant spouse can place additional obstacles along the path, even if the court ends up intervening.

8. Proving a Separate Property Credit May No Longer Be Possible

If the participant spouse had money in the deferred benefit plan at the time of the marriage, those funds would be their separate property, and the non-employee would not be entitled to share the funds. However, the participant should display the balance of the pre-marital properties.

Most financial institutions maintain records for about seven years. But if the account records aren’t available, that can slow down the QDRO process, too. 

9. It Takes Time Getting a Judge’s Signature

When it comes to the timing of your QDRO, it can get confusing. When it comes to the question of does a QDRO expire, the answer is  —  not exactly. Still, even in the best scenario, with no objections from the other party, inputting a QDRO doesn’t mean it will be processed promptly.

it could take months from the date the QDRO is submitted to the Court for it to pass through the clerk’s office and ultimately be signed by a judge. 

10. Amendments May be Required

Many plan administrators may review the QDRO request before the court signs it. Others will not. Unfortunately, in some cases, a QDRO may violate the terms and conditions of a financial plan, which means no party is required to adhere to it. 

Once the retirement plan approves the QDRO, you and the former partner must sign and officially submit it. At that time, it then becomes a part of the divorce proceedings. The QDRO is a legally binding document that both parties must abide by. Some retirement plans may want a certified copy sent to them before they will transfer any funds.

11. Can Money From A QDRO Be Received Immediately?

It depends on the type of plan involved, but some QDRO cash payments can be granted immediately. 401(k), 403(b) and 457 Plans, IRA’s, ESOP’s and Thrift Savings Plans allow immediate cash distribution. Some pensions and military/federal service plans only allow monthly payments—not lump sums. Any single QDRO is not allowed to overwrite its initial terms.

12. Can A QDRO Be Reversed?

It’s very difficult to reverse the proceedings of a QDRO. If you’ve changed your mind about wanting a QDRO, you need to have the courts and account administrator agree that the retirement account is against your divorce agreement and should therefore be modified. You may need to negotiate the terms with your former spouse.

13. Can an Ex-Wife Claim Pension After Divorce?

Your former spouse can claim benefits on your record if you’ve been divorced for up to two years. Your ex-spouse can be eligible for a share of your retirement benefits, as determined by the qualifications of your QDRO.

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Conclusion

Since it can seem intimidating to face, you might wonder, does a QDRO have to be prepared by an attorney? The fact is, you could go it alone; a QDRO doesn’t have to be prepared by an attorney. 

That said, it could be difficult to understand the complexity and legal terminology of the document. Plus, if you’re asking how long after a divorce can you file a QDRO?, odds are, the clock is already ticking. Fortunately, a family lawyer can help with this and other related matters, making the process simpler and less stressful.