Qualified Domestic Relations Orders (QDROs) in Utah
South Jordan Family Law Attorneys Dedicated to Your Best Interests
A divorce decree often requires the preparation of a qualified domestic relations order (QDRO) when one or both of the spouses has a retirement account such as a 401(k) or pension that need to be split. A QDRO is a court order that provides for the division of a retirement account.
After a QDRO, a separate retirement account is created for the recipient spouse and the recipient spouse can choose to roll over their funds to a different account provider. Parties often rely on the funds from a QDRO to help them move forward with their lives following a divorce. Don’t wait to receive your money. The attorneys at Pearson Butler will work quickly to ensure that your QDRO is created and processed as quickly as possible.
For more information, contact a family law attorney at Pearson Butler for a confidential consultation.
Withdrawing Funds from a 401(k) at the Time of Divorce
Current law allows the party receiving funds through a QDRO to make a withdrawal at the time of the QDRO without paying the early withdrawal penalty. Although there is no penalty for this withdrawal, the party cashing out money from the 401(k) is responsible for the associated state and federal taxes owing on that money.
In negotiating a property settlement, parties should keep in mind that pre-tax dollars, such as retirement funds, are not equal to post-tax dollars, such as equity in the home. This is because of the tax obligation associated with the retirement funds reduces the cash value to the party who receives retirement funds in a settlement. Ensure you receive the best settlement possible by having an attorney at Pearson Butler represent you in your divorce negotiation. When you understand QDROs and retirement accounts, you are in a better position to achieve financial security.
What Should I Put in My Divorce Decree?
Each separate retirement account needs to be listed in a divorce decree, including pensions, 401(k)s, 403(b)s, and IRAs. The Decree needs to state who is being awarded each account. When an account is being divided, the Decree may indicate a dollar amount to be divided as of a specific date or may state a percentage to be divided as of a specific date.
Retirement funds earned during the marriage are usually divided as of the day of the divorce. It is very helpful to have the Decree specify who will be responsible for preparing any necessary QDROs and who pays for any associated costs, such as attorney’s fees or plan administrator fees.
Contact a South Jordan Divorce Lawyer Regarding QDROs
If you have questions regarding a qualified domestic relations order and would like more information, contact an attorney who has the knowledge and skill to effectively assist you. The divorce attorneys at Pearson Butler understand the nuances involved in preparing QDROs and are happy to discuss the specifics of your individual case.
Call Pearson Butler at (800) 265-2314 or contact the firm online.