Asset division during a divorce may require a Qualified Domestic Relations Order (QDRO) when dividing retirement assets. For many couples, especially those who are divorcing later in life, retirement benefits have the single most significant impact on their financial future, and there are few more valuable assets to split. A QDRO allows for the division of accounts and assets that are not even technically in use yet.
For instance, one spouse may have a pension plan that was earned in part or in full while married. That spouse may not have retired yet, and even though the account is funded, will not be getting the benefits. This makes it easier for the other spouse to overlook, though they too would have lived off those benefits after retirement.
These assets can be divided by a QDRO, which officially sets up how the monthly benefits should get divided after retirement, even if that is years after the divorce. The spouse who is not the employee may qualify, for example, for half of the percentage of the pension earned while married. If the marriage lasted for half of the term of employment required to earn the pension, then that spouse may be entitled to 25% of the monthly payments. Every case is unique, but this shows how division can happen and the importance of considering this type of paperwork.
Do not overlook assets in divorce. Remember that all decisions made while ending a marriage can drastically impact the rest of your life. Be sure you take the time to consider all your options and the steps that you need to take.