How Retirement Benefits are Divided in a Divorce: Arizona Community Property Laws

What does “Community Property” mean?

two people sitting across a table with miniature house and cars divided in half in an arizona divorce

In the state of Arizona, all assets acquired during the marriage, by either spouse, are presumed to be community property.  “During the marriage” is defined as the period from the date of marriage to the date of service, or the date a spouse is served with a Petition for Dissolution of Marriage (a.k.a. Divorce) or a Petition for Legal Separation.

This Community Property law means that in the event of divorce, those community assets acquired during marriage should be divided equally, 50/50, between the parties.

Retirement Benefits: What is Community Property and what is Sole and Separate?

Contributions to retirement accounts and benefits during the marriage include monetary contributions by a spouse, matches by their employer, as well as increased benefits to a pension as the result of years worked or purchased (“service time”).  All of these are considered as community property or assets acquired during the marriage and are therefore subject to division in a divorce or legal separation.

If you were contributing to a retirement account before your marriage, anything earned up to the date of marriage is considered your sole and separate property. Likewise, any contributions or service time accrued after the date of service is also considered your sole and separate property.

Qualified Domestic Relations Orders (QDROs)

For divorces or legal separations in which the parties have one or more retirement accounts that need to be divided between the parties, a Qualified Domestic Relations Order (or QDRO) will be required.

A Qualified Domestic Relations Order (“QDRO”) is a court directive (order) to the plan administrator of the retirement asset or benefit that defines how the parties’ retirement accounts will be divided and how they will be allocated to the non-employee party after a divorce or separation.  One QDRO will be required for each retirement account to be divided.

The Process of Preparing and Completing a QDRO

During or before a Decree has been entered in a divorce or legal separation, the parties and their counsel may determine how the retirement assets will be divided and the applicable QDROs will be prepared.

man holding jar of retirement savings money

Some of the major considerations include:

  • What types of accounts do each of the parties hold, and how many? As such, how many QDROs will need to be prepared?
  • Does one or more of the retirement accounts in question have a sole and separate portion or has the community interest in these “mixed” accounts been calculated?
  • Will the QDRO will include a survivor benefit?
  • Will the QDRO be subject to gains or losses?
  • How will the divided funds be allocated to the non-employee spouse?

These determinations can either be made by agreement between the parties or by court order, either in the Decree or in subsequent orders.  If the parties are able to come to a mutual agreement on these issues during the divorce, before a decree has been signed and entered with the court, they will save significant time and money.

Those agreements can then be outlined in the divorce decree, which, once ordered, will mean less work and fees for your QDRO preparer.  If the parties are unable to come to agreements on these issues before the Decree and the division of retirement accounts and the QDRO preparation, then the QDRO attorney will need to address those issues with the parties and either get the agreement of the parties or seek Court intervention.

Who prepares QDROs?

For many of us, our retirement assets or benefits may be of significant value, therefore the calculation and division of the same is of the utmost importance.  These calculations are complex and are best completed by an experienced QDRO attorney.

Here at Owens & Perkins, one of our attorneys, Max Hanson, not only has 25 years of experience as a family law attorney and working with the division of retirement assets, but has received additional extensive, specialized education in the calculation, preparation and implementation of QDROs, COAPs, and other like orders. He has been certified by the American Association of Certified QDRO Preparers as a Certified QDRO Specialist (“CQS”)[1].

Learn more about Attorney Max Hanson

What happens after a QDRO is prepared?

Once prepared, a QDRO is filed with the court and entered as an order by the judge. Once the order is in place, it is sent to the Plan Administrator of the employee spouse’s plan or benefits for the purpose of executing the QDRO.

The Plan Administrator will determine whether the QDRO meets the requirements of the particular plan it was prepared for. If it does not, the QDRO may be rejected and the parties will be required to go through the preparation process again to address the relevant issues.

When the QDRO is accepted by the Administrator, they will implement the division and payment of the instructions according to the order and the requirements of retirement plan.

Learn More About How QDROs Are Prepared

Dividing Assets in Your Own Divorce or Legal Separation

Every divorce and legal separation case is different, as are the parties involved and their respective retirement plans.  To ensure your QDRO is drafted properly, will be accepted by the Plan Administrator, and is enforceable, it’s important to utilize an experienced QDRO attorney.

Our very own Max N. Hanson, Esq. has completed significant coursework and passed proctored exams that have qualified him for making the complex, difficult calculations and determinations that are requisite for QDRO preparation.   His 25-year career as a family law attorney and his aforementioned qualifications make him an excellent choice as a QDRO preparer.

Schedule a 30-minute Legal Consultation

If you’re going through your own divorce or legal separation, we are here for you.  Whether you need full representation or just need assistance with drafting a QDRO, our attorneys at Owens & Perkins have the experience, skill, and tenacity to help you resolve your case.  Call us today at 480.994.8824.

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Learn More About Qualified Domestic Relations Orders:


Qualified Domestic Relations Orders:  HOME

What is a Qualified Domestic Relations Order and Why Do I Need One?

The Process of Preparing and Completing a QDRO

How to Ensure your QDRO is Drafted Properly, Will Be Accepted, and is Enforceable


[1] The American Association of Certified QDRO Professionals and certification herein are not an organization accredited by or recognized as an official board certification or specialty by the Arizona State Bar or its Board of Legal Specialization.