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What Is a QDRO, and When Is it Needed in an Illinois Divorce?

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Plainfield divorce QDRO attorneyWhen dividing property during divorce, issues involving assets such as retirement plans or pensions can be difficult to resolve. In many cases, it is necessary to use a QDRO (Qualified Domestic Relations Order) to distribute the funds in these accounts or plans. According to the IRS, a QDRO is a “judgment, decree or order for a retirement plan to pay child support, alimony or marital property rights to a spouse, former spouse, child, or other dependent of a participant.”

Why Is a QDRO needed?

In many cases, retirement plans or pensions may be some of the most valuable assets owned by married spouses. Therefore, when it comes time to divide marital property, the funds in these accounts or the payments from pension plans may need to be split between spouses. While a divorce decree may state that a former spouse should be awarded part of the other's retirement fund, it is not official unless there is a QDRO in place. In addition, a QDRO allows funds to be withdrawn and distributed from a retirement account (such as a 401(k) or IRA) without incurring taxes or penalties. In order to obtain a QDRO, you should contact an experienced attorney who can help you determine the documents needed in order to ensure that funds are distributed fairly.

When Should a QDRO Be Filed?

Although a QDRO can be filed after a divorce has been finalized, it is better if it is filed prior to the divorce decree being issued. Otherwise, if the plan participant retires, and payments are distributed, the QDRO will only pertain to future payments, which means money lost by the other party. Another possibility is that if the plan participant remarries, the next spouse could file their own QDRO and, again, the first divorcing party may be shorted funds. Therefore, in order to ensure the highest benefits possible, the recipient will need to get the QDRO filed as soon as possible, and it is best to do so early on in the divorce process.

Finding Hidden Assets

In some cases, a spouse may try to hide his or her retirement assets or avoid disclosing the balance of accounts. Therefore, it will be helpful to contact the provider of the plan directly. An experienced attorney can assist you in finding the needed information and ensuring that the correct monetary amounts are properly divided during divorce.

Contact a Joliet QDRO Attorney to Ensure You Are Getting Your Fair Share

QDROs, divorce decrees, and retirement plans can all be confusing. At Tedone & Morton, P.C., we can help ease your stress during the divorce process. Our experienced Plainfield divorce attorneys can sort through the numbers and paperwork for you and ensure that your marital assets are divided properly. Call 815-733-5350 to set up a free consultation today.

Sources:

http://www.pensionrights.org/publications/fact-sheet/i%E2%80%99m-getting-divorced-what-qualified-domestic-relations-order-and-why-should- https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-qdro-qualified-domestic-relations-order

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