The spouse or former spouse is allocated a share of the participant's cost investment in the contract equal to the cost times a fraction. The numerator of the fraction is the present value of the benefits payable to the spouse or former spouse. The denominator is the present value of all benefits payable to the participant.
An individual may be able to roll over tax-free all or part of a distribution from a qualified retirement plan that he or she received under a QDRO. She began investing in this account four years ago. As a result, the full value of this IRA is a marital asset. They will split that account during the divorce negotiations as if it were any other portfolio. A QDRO requires several steps. Typically, the parties and their attorneys draw up the QDRO.
A judge then signs off on it. The alternate payee then submits it to the administrator of the retirement plan. Once the plan administer accepts a QDRO, it will follow the order. In an ideal world, you want to know that the QDRO is final before your divorce goes through. You also want to submit a QDRO promptly to ensure that you receive the full amount that is yours.
You may not get the full amount if a plan participant dies before the QDRO goes through or if they start taking distributions themselves. Finally, you can rely on us for the prompt, personal service and attention you deserve in the division of the relevant retirement plan, which most often comes at the end of your case, when you are more than ready to have all of the issues resolved. We must have complete information about both parties as set forth in the QDRO information form names, addresses, social security numbers, date of birth, date of marriage and divorce, etc.
We also need copies of your divorce decree or separation agreement so we can evaluate how much each party is to receive. We will contact the plan to request this information if it is not included in your application. Once we have received all the information described above, we will quickly and properly draft your QDRO and send it to you or your lawyer for review. Please review this draft carefully to make sure all information is accurate.
If you have any questions about the draft or corrections to be made, please let us know. We make every effort to accomplish this step within one week of our receipt of all requested information and the fee. The other side should, acting reasonably, accept the QDRO, as long as it accurately reflects the underlying provisions of the divorce decree or separation agreement.
However, people do not always act reasonably in divorce cases. It is usually preferable for you to obtain the other side's consent to the QDRO. If you feel your spouse will unreasonably delay or hinder this step, or if the situation is an emergency, it is potentially possible for us to assist or even to omit this step.
Please let us know if this is the case. Please do not sign your QDRO at this point or ask your former spouse to do so until step 4 is completed. If the plan requests any changes in the QDRO, we will negotiate them with the plan.
It is not unusual for plans to request changes in QDRO's. Do not be alarmed if you receive a copy of a letter from the plan requesting changes in the draft QDRO. These usually involve minor changes in wording which will not affect the amounts involved. We will work out any changes requested by the plan. Military and Federal civil service pension division Orders are different and will not be reviewed as drafts by the plans, so this step is omitted in those cases.
A few corporate plans also decline to review draft QDRO's in advance. In such cases, step 4 is omitted and you proceed directly to step 5. Once the plan has pre-approved the QDRO in draft form or where approval is not allowed , we will send you a final copy, which except as set out above requires the signatures of all parties.
It then must be presented to your state divorce or family court for signature by a judge. A certified copy is one which bears the original signature and seal of the clerk of the court. A certified copy usually may be obtained from the clerk of the state divorce court for a small fee. You must send a certified copy to the plan for final approval, acceptance and payment.
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