New Jersey spouses may be interested in information about how retirement plans are divided in a divorce. This involves a certain type of document that is the sole way to change the apportionment of retirement funds.
The end of a marriage involves a number of different divorce legal issues. One of the more important, at least from a financial perspective is the property division phase of the divorce. When the couple owns one or more retirement accounts, these may be divided in the split. However, since the accounts are generally in only one of the ex-spouse’s names, a specific court or administrative order is required in order to divide the account. This order is known as a Qualified Domestic Relations Order.
A QRDO allows the administrator of a retirement plan to recognize a second payee on the account besides the principal. The various parties able to be named on a QRDO are limited to a spouse, former spouse, or the children or dependents of the principal account holder. The QRDO must contain certain information, such as the name of the plan or plans involved and the portion that should go to the alternate payee, along with the names and addresses of the parties involved. However, the QRDO cannot add or increase benefits on the plan, nor can it allow for funds already apportioned by a prior QRDO to be sent to a new alternate payee.
Understanding all of the aspects that go into divorce proceedings can be difficult without the guidance of an attorney. The attorney may be able to walk a spouse through the process and represent them at each hearing and settlement negotiation. The attorney may also be helpful in drafting a fair settlement agreement on behalf of their client.