A qualified domestic relations order is an order that needs to be prepared within a divorce when dealing with pension funds or qualified retirement accounts. The QDRO establishes your soon-to-be-ex-spouse’s legal right to receive a designated percentage of your qualified plan account balance or benefit payments.
For non-qualified retirement accounts, such as an IRA, a QDRO is not necessary. Instead, the written agreement will suffice to transfer the funds.
There are special exceptions for qualified retirement accounts when money is being transferred pursuant to a divorce. Be sure to ask your mediator about the options you have available when discussing your retirement accounts.
Who issues a Q.D.R.O.?
If you're awarded part of your former spouse's retirement account (either through a property settlement or via a judge), the court will issue a QDRO that may have been drafted by your divorce attorney. The QDRO is then submitted directly to your former spouse's retirement or pension plan administrator.