
What is a QDRO and do I Need One?
On Behalf of Law Offices of Michael A. Robbins | Feb 26, 2019 | Uncategorized |
If you are thinking about filing for divorce in Michigan, you probably know that part of the divorce process involves the division of marital property. Generally speaking, any retirement benefits that you earned-or that your spouse earned-during the marriage are likely to be classified as marital assets and thus will be subject to division. If you do have any kind of retirement benefits, from pension plans to individual retirement accounts (IRAs), you will need to learn more about how the funds contained in those accounts will be divided. This is where a Qualified Domestic Relations Order (QDRO) will come into play. In short, when it comes to qualified retirement benefits, a QDRO can allow for funds to be withdrawn early from retirement accounts without paying the typical penalties, and they can also outline the ways in which the non-employee spouse (the one receiving the funds out of the other employee’s retirement account) will be paid.
The following will explain more about how QDROs work and why they can be important for dividing retirement benefits in a divorce.
What is a QDRO?
If dividing retirement benefits is part of your divorce settlement, a QDRO is an extremely important tool. A Qualified Domestic Relations Order (QDRO) is a court order that is a type of domestic relations order. The University of Michigan provides an FAQ sheet about QDROs, which explains that they can be used for a wide variety of domestic relations issues, including “property rights, alimony, or child support.”
For many Michigan residents, QDROs are necessary when retirement accounts are being divided. For most retirement accounts, the beneficiary (along with anyone else) cannot make a withdrawal without incurring a 10% penalty until you are 59½ years old. With a QDRO, funds can be taken out of a retirement account for purposes of property division without incurring that penalty. However, taxes will still need to be paid on the amount withdrawn. The QDRO can also specify how the non-employee spouse can be listed as an alternate payee from the account, and how that alternate payee will receive payment(s).
When Both Spouses Have Nearly Equal Retirement Benefits
If both spouses have been working and earning retirement benefits throughout the course of the marriage, a QDRO might not be necessary since property can be divided in such a way that both spouses keep their own retirement benefits and do not receive funds from the other’s accounts.
Likewise, even if one spouse was a stay-at-home parent during the marriage and did not earn any retirement benefits, it may be possible to reach a property settlement that keeps the employee spouse’s retirement accounts intact but provides the other spouse with assets that account for his or her portion of the current benefits and the amount that they are likely to accrue in interest in the future.
Learn More From a Michigan Divorce Lawyer
If you have a question about QDROs or dividing retirement benefits in your Michigan divorce, you should reach out to a Michigan divorce lawyer as soon as possible. Contact the Law Offices of Michael A. Robbins to learn more about the services we provide.
Recent Posts
Archives
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- May 2016
- April 2016
- March 2016
- February 2016
- December 2015
- November 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- March 2015
- February 2015
Categories
RSS Feed
Let us help you

Contact The Firm
3910 Telegraph Road
Suite 200
Bloomfield Hills, MI 48302
Phone: 248-646-7980
Fax: 248-646-7989