Frequently Asked Questions
Q. What is a QDRO?
A. “QDRO” or “QUADRO” stands for Qualified Domestic Relations Order and is a particular type of court order that divides retirement plan benefits between parties due to marital dissolution or separation. This court Order creates and/or recognizes an employee’s former spouse’s (or alternate payee’s) right to receive all or a portion of the benefits payable with respect to a participant (company employee) under a retirement plan.
QDROs are made pursuant to state domestic relations laws (including California community property laws) and under federal law, such as the Internal Revenue Code and The Employee Retirement Income Security Act (ERISA).
Q. Do I need a QDRO?
A. If you or your spouse earned retirement benefits through employment during your marriage, then the non-employee party is entitled to a portion of the retirement benefits as an Alternate Payee (the former spouse of a participant in the retirement plan). Without a QDRO, Federal laws prohibit retirement plans from making payments to anyone other than the participant; therefore, a QDRO is required to ensure that the retirement plan can make benefit payments directly to the Alternate Payee.
Q. What is the difference between QDRO Helper and other QDRO preparation services that I have seen online?
A. Whenever you see that a QDRO can be prepared “instantly” online, that usually means that you are simply putting information into a software program that generates a generic document. Unless you are an attorney or an individual who understands community property, California law, and ERISA rules, it is very difficult to ensure that you have an accurately drafted QDRO. Many of our clients come to us after trying these online instant QDRO preparation websites because the document they are provided with is rejected by the plan administrator and/or the court. In contrast, each document prepared by QDRO Helper has been written and reviewed by a licensed attorney who has drafted hundreds of QDROs, reviews plan specific information for each and every QDRO, gets pre-approval from the retirement plan administrator whenever possible, and who knows how to format a document to be accepted by both the retirement plan and the court.
Q. Do all QDROs have the same contents?
A. No. Although every QDRO has to have certain specific provisions mandated by law, the rest of the content will vary based upon the type of retirement plan [for example a pension QDRO will be different than a QDRO for a 401(k) plan], the type of benefits available, the participant’s employment and retirement status, and the agreement between the parties.
Q. Who can be an “Alternate Payee”?
A. Alternate Payees under QDROs are usually a spouse or former spouse of the retirement plan participant, but can also be a child or other dependent of the participant. QDROs can provide benefits to Alternate Payees for marital property rights, child support, or alimony payments.
Q. Who is the Plan Administrator and what do they have to do with my QDRO?
A. The Plan Administrator is the individual or entity designated in the plan documents (often a “Summary Plan Description”) as the administrator. The Plan Administrator is responsible for determining whether a domestic relations order is a QDRO; i.e. the Plan Administrator will follow certain established procedures in order to approve or reject a proposed QDRO and will administer distributions to both the plan participant and alternate payee pursuant to the terms of an approved QDRO. Even if you have a domestic relations order filed at court, the plan administrator can reject the Order and not honor the benefits awarded to the Alternate Payee until an appropriate QDRO is submitted and approved by the Plan Administrator. All QDROs are subject to the provisions of the retirement plan to which the Order will apply.
Q. The retirement plan sent me a model QDRO – why should I use QDRO Helper instead of doing the QDRO myself?
A. Retirement Plans are very complex, and it is likely that the model will provide multiple alternative paragraphs that are acceptable to the Plan, particularly regarding forms of payment to the Alternate Payee, forms of division of the asset, and options for survivor benefits. Understanding these paragraphs, and the effect they will have on the Participant’s and Alternate Payee’s benefits, can be difficult for many individuals. Due to the sums of money involved, and the fact that an unintended error in the QDRO may not become apparent for many years until payments commence, it is critical to have full confidence in the accuracy of your QDRO. The attorneys at QDRO Helper will draft your order in light of both the plan’s variable options and your marital settlement agreement or divorce judgment. Having an attorney at QDRO Helper working on your QDRO can help avoid litigation in the future by ensuring that any issues not addressed in your marital settlement agreement are clearly explained and agreed to before the retirement plan begins making payments to the parties.
Q. What kind of language should my Marital Settlement Agreement (MSA) or divorce decree contain?
A. Ideally, your MSA or divorce decree should clearly identify the retirement plan, state the dollar amount or percentage of the retirement benefit to be awarded to the Alternate Payee, and also address survivor benefits and post-retirement subsidies such as COLAs. It is possible to address these issues with the parties after the divorce decree is entered as part of the QDRO preparation process, but it makes the QDRO drafting process more efficient if these issues have already been explained by the parties’ family law attorneys and agreed upon by the parties.
Q. My spouse and I have chosen to with QDRO Helper together, as a neutral. Should I have my divorce attorney review the QDRO drafted by QDRO Helper?
A. As is explained in detail in our fee agreement, when you choose the Flat Fee QDRO Preparation, the QDRO Helper attorney drafting your QDRO does not represent either you or your former spouse, but is acting as a neutral third party solely retained to draft the QDRO as agreed to by the parties without advocating for the interests of either party. As such, if you have any questions about what is in your best interest or if QDRO Helper presents you and your former spouse with various options on an issue that was not addressed in your divorce agreement, we strongly advise you to contact your family law attorney. QDRO Helper cannot advise you what is in your best interest, but can only explain the options in neutral legal terms.
Q. I can’t get my former spouse to sign the QDRO – how do I get the QDRO filed?
A. QDROs must be signed by both parties and a judge in order to be valid. In most cases, your divorce judgment will order that the parties cooperate to obtain a QDRO in order to divide retirement benefits. Therefore, if your former spouse refuses to sign the QDRO, your former spouse can be held in contempt of court. Alternatively, papers can be filed at court that request that the court sign on behalf of the non-cooperative spouse or can order your former spouse to sign the document. This type of motion is called an elisor motion in most California courts.
Q. I am trying to complete QDRO Helper’s forms but cannot get any information about the retirement plan from my former spouse and the Plan Administrator won’t talk to me – what can I do?
A. First, we recommend that you contact the attorney who represented you in your divorce to see if they have this information in your file and can provide you with a copy. If your attorney does not have this information, then a document called a Joinder can be filed with your divorce court for many types of retirement plans. For other plans, a Notice of Adverse Interest letter can be sent to the plan administrator. A Joinder brings the retirement plan into your marital dissolution action and also puts the plan on notice that you have an interest in your former spouse’s retirement benefits. Once the plan has been joined, you can have the plan administrator served with a subpoena requiring that they provide you with the information necessary to draft a QDRO. While QDRO Helper can prepare a Joinder for an additional fee, our attorneys do not prepare subpoenas and you should consult with your family law attorney if you need a subpoena or other discovery services.
Q. What if I have additional questions?
A. You can call 619-786-QDRO to speak with one of our friendly attorneys or email us at info@qdrohelper.com.