What is a QDRO?
A QDRO (Qualified Domestic Relations Order) is a court order that is issued in connection to a divorce proceeding when the court divides retirement, pension, or other qualified accounts. The requirement for the issuance of the QDRO needs to be included in the Idaho Divorce Decree or the plan administrator will not recognize the QDRO.
The QDRO establishes a spouse's legal right to receive a designated percentage of the other spouse's qualified plan account balance or benefit payments. In Idaho, qualified accounts are community property, and the ex-spouse may be entitled to recover 50% of the money placed into the account during marriage and any growth that has occurred during marriage. For example, if you (which includes any employer matching funds) have contributed $100,000.00 during marriage to a qualified account and the account has accumulated $100,000.00 extra in growth for a total of $200,000.00, you spouse would be entitled to 1/2 of these funds, or $100,000.00.
Also, the QDRO arrangement permits your ex to withdraw his/her share and roll the money over into his or her own IRA to the extent current withdrawals are permitted by the terms of the qualified retirement plan. The IRA rollover procedure allows your ex to take over management of the money while continuing to postpone taxes until funds are withdrawn from the IRA. Once again, the important point from your perspective is that your ex will be the one who owes the taxes. If this doesn't happen, the plan administrator will split the account at the date of divorce and place your ex's funds into a separate account.
If you need to create a QDRO for your divorce case, please contact an Idaho Divorce Lawyer. If you are considering a divorce or are currently in a divorce proceeding that will impact a qualified account and necessitate the preparation of a QDRO, please contact Snake River Law PLLC by email or at 208.406.9885.
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