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Understanding how "QDROs" work in a California divorce

A Qualified Domestic Relations Order, known as a "QDRO," may be one of the most useful documents in resolving a divorce and giving effect to the court's division of community property. A QDRO, pronounced "quadro," is an order issued by a California court specifying how a retirement plan will be split by the parties to the divorce.

The QDRO has the legal effect of requiring the plan administrator to pay a portion of the retirement benefits to an "alternative payee," who is usually the beneficiary's former spouse. Under the Employee Retirement Income Security Act, commonly known as "ERISA," retirement plan administrators are required to give effect to QDROs by making court-ordered payments to the alternative payee. Court orders that do not comply with ERISA have no legal effect and cannot require a plan administrator to abide by the court's order. QDROs, however, cannot change either the amount or timing of benefits payable under the plan. A single QDRO can deal with several retirement plans.

In California, retirement benefits that accrue during the marriage are considered community property. Dividing the accumulated benefits in many retirement plans is mathematically simple and not subject to dispute by either of the divorcing spouses. The court determines the amount of benefits accumulated during the marriage and awards one-half of that amount to each spouse. If a retirement plan is more complex, such as a defined benefit plan, the calculation of accrued benefits may require the assistance of an actuary.

QDROs are complex legal instruments. Consulting an experienced divorce attorney can ensure that the provisions of a QDRO accurately express either the agreement of the parties or the order of the court.

Source: United States Employee Benefits Security Administration, "QDRO's - An Overview FAQs," accessed on Nov. 27, 2017

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