The term Qualified Domestic Relations Order may sound foreign to some people, but divorced couples with retirement accounts may be well aware of its definition and implications. Splitting a retirement account pursuant to divorce can get tricky, and the rules governing this property division can vary from state to state.
In the simplest terms, though, a Qualified Domestic Relations Order, or QDRO, is a court owner allowing someone outside of the account's ownership to collect money from the fund. Persons eligible for this order can include current or former spouses as well as children.
The funds of a QDRO can be used to fund child support in the aftermath of a divorce, among other uses. Such a court order requires some basic information to be laid out in order for the judgment to be approved. The alternate payee, as well as the mailing address of that person, must be attributed specifically to one fund. The terms of the QDRO, including percentage owed, number of payments, and time period covered, must also be included.
Approved QDROs are exempt from the early-withdrawal penalties that typically accompany withdrawals from retirement funds before the funds reach maturity.
Because QDRO forms are complex, and because the laws governing QDROs in Florida are different from what you may find elsewhere, it's best to seek out legal representation in order to draft a QDRO that will gain court approval and satisfy your case-specific needs. Doing so can save you time and money and give you a greater chance at having your court order approved.
Source: Reuters, "What is a QDRO? How divorce affects retirement," Andrew Chow, April 19, 2012