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Split retirement funds with qualified domestic relations order

One of the biggest reasons that people in the state of Texas work their entire lives is to make sure that they can retire comfortably. When two people are married, they often share this goal. However, their retirement dreams will change drastically if they decide to get a divorce. A qualified domestic relations order, also known as a QDRO, is an important part of the divorce process when a divorcing couple needs to divide retirement savings.

What is a QDRO?

A qualified domestic relations order makes it possible for an ex-spouse to get money from your retirement account, or for you to get money from your ex's account. It is necessary if either of you or both of you need to divide your retirement funds.

What does a QDRO need to have?

A QDRO needs to have some important pieces of information, including the participant's most recent mailing address and name, along with the address and name of every alternate payee -- for instance, the spouse receiving the money from a retirement account.

Other information that must be included is the name of every plan to which the order will apply, along with the percentage or amount of money that will go to the alternate payee. In addition, the time period of the payments or the quantity of the payments must be in the order.

How does it all work?

A QDRO is necessary for any plan for retirement that the Employee Retirement Income Security Act covers. The administrator of the plan has to approve this court order, which it will if it meets particular requirements. The benefit of using a QDRO is that transfers made from a retirement account through this court-issued judgment will not incur early-withdrawal penalties.

A qualified domestic relations order can be complex. For this reason, using an order form that a plan administrator provides may not be the best option.

Consulting an attorney in the state of Texas can be beneficial because the attorney can put together an order for you that best meets your unique needs. With a lawyer's help, you can make sure that the splitting of all marital assets occurs in a fair manner, thus putting yourself in the best position possible to be financially secure after the finalization of your divorce.

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