What is a QDRO?
A Qualified Domestic Relations Order (“QDRO”), or like order, is a court directive (order) to a 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.
The administrator of the retirement plan ultimately has to approve the QDRO, ensuring that it meets all the requirements under the plan and federal law. Once approved it’s then the administrator’s responsibility to enforce and apply the division or payments from that retirement asset or benefit as set forth in QDRO.
It is crucial that the QDRO be in the proper form and have all the required elements so it can be approved by the plan administrator and the monies from these retirement assets disbursed appropriately as outlined in the order.
Why do I need a QDRO?
Arizona State Community Property Laws
In Arizona, all assets acquired during a marriage are presumed to be community property and, in the event of a divorce or legal separation, should be divided equally 50/50 between the parties. “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 the Petition for Dissolution of Marriage or Petition for Legal Separation.
Contributions to retirement accounts and benefits during the marriage, which include both 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 are considered as community property or assets acquired during the marriage and are therefore subject to division in a divorce or legal separation.
What is considered Community Property?
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. 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.
Types of Retirement Accounts Subject to Community Property Laws
- Most private employers and companies’ tax qualified retirement plans, such as 401(k)s or pensions, are subject to and can be divided by a QDRO
- Public sector plans, such as Federal Employee Retirement System pensions (“FERS”), Thrift Savings Plans (“TSP”), Arizona State Retirement System pensions, System, can also be divided by similar orders, such as a Court Order Acceptable for Processing (“COAP”) or other like QDRO orders.
For each retirement account that is to be divided, one QDRO, COAP, or other similar type of order will be required.
Our QDRO Services
Max N. Hanson, Esq.
In preparation of the QDRO (or other similar order), in addition to determining the proper order needed and requirements for the same, calculations are made as to the community portion of the specified retirement account and how it will be divided between the parties. These calculations are complex and are best completed by an experienced QDRO attorney.
Here at Owens & Perkins, one of our attorneys, Max Hanson, has not only 25 years of experience as a family law attorney and working with the division of retirement assets, but has received additional extensive and specialized education in the calculation, preparation and implementation of QDROs, COAPs, and other like orders.
Mr. Hanson has been certified by the American Association of Certified QDRO Professionals as a Certified QDRO Specialist (“CQS”). As a CQS, Mr. Hanson has completed significant coursework and passed proctored exams in connection with the same that have qualified him for making the complex, difficult calculations and determinations that are requisite for QDRO preparation.
Mr. Hanson’s QDRO services include the preparing, drafting, review and advising on QDROs and other like orders needed for:
- Defined contribution retirement plans (ie., 401(k), 403(b), and profit sharing)
- Defined benefit retirement plans (ie., the classic pension)
- State and Federal retirement plans (ie., FERS, TSP, ASRS, Railroad Tier II)
- Military retired pay and benefits
Mr. Hanson is also available to provide advice and counsel to parties and their counsel regarding:
- The appropriate and necessary language and terms relating to division of retirement assets and benefits for inclusion into the proposed divorce decree and/or property settlement agreements
- QDROs or other like orders prepared and drafted by others.
 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.