Qualified domestic relations orders, which are issued by family law courts, grant divorcees in Texas a portion of an ex-spouse’s retirement benefits. Benefits must be part of an employer-sponsored plan for the retirement plan to qualify. It is common to draft QDROs during the divorce, but the process can also take place after the divorce is final.
With a QDRO, the spouse earning the benefits is the “participant.” The spouse set to receive benefit payments through the QDRO is the “alternate payee.” Alternate payees can receive benefits throughout the lifetime of the participant. The alternate payee can also become eligible for survivor benefits after a participant dies.
It is necessary to distinguish between a QDRO and a domestic relations order. Domestic relations order assignments are the sole discretion of the court. However, acceptance from a retirement plan is needed before a QDRO is active.
Federal regulations stipulate that a former spouse is only entitled to retirement benefits if a QDRO is in place. For this reason, a separate record from the divorce decree is needed to secure QDRO payments.
It is best to attach a QDRO to a qualified retirement plan as early in the process as possible. However, filing at a later date is not a serious problem. When a divorced participant retires, he or she will receive benefits alone in the absence of a QDRO. A QDRO filed after retirement allows for benefit portions to the alternate payee but will not affect any payments the participant has already received.
Property division is a major concern for many people choosing to end a marital union. Individuals concerned with a fair property division that allows them to rebuild their lives after a divorce may find the services of a family law attorney helpful.