Qualified Domestic Relations Orders in New Jersey
Retirement assets can be tricky to divide in a divorce. If one spouse has an employer-sponsored retirement plan, a Qualified Domestic Relations Order, or QDRO, is essential to have in order to protect the other spouse.
A high-net worth divorce attorney can help you to understand QDROs and work with you to draft a document that protects your best interests. Discuss Qualified Domestic Relations Orders in New Jersey during a consultation with a skilled member of our legal team.
What are Qualified Domestic Relations Orders?
A qualified domestic relations order, or QDRO, assigns an alternate payee the right to receive a portion of the benefits payable in a retirement plan. The QDRO is subject to equitable distribution in a divorce, so obtaining this order entitles an individual to a portion of their spouse’s retirement assets.
Essentially, a QDRO separates out the recipient’s portion of the retirement or benefits so that they are not dependent on the other party to provide them with payments. This ensures that ex-spouses entitled to retirement assets receive the compensation they are owed without facing distribution issues. A New Jersey attorney can help an individual determine whether they are entitled to a portion of their ex-spouse’s retirement earnings through a QDRO.
Important Aspects of a QDRO
It is important to note that a qualified domestic relations order is court-ordered and issued by a judge. This means the administrator has to ensure that the set amount of money or percentage is given to the alternate payee so that they are able to get their portion under equitable distribution. The only person that can cancel a QDRO is a judge, so it is essential to properly draft these agreements with the help of a knowledgeable NJ attorney.
One should also note that a QDRO itself is not inherently income, but instead may be considered income upon its payout. For example, if someone received a portion of their spouse’s pension and it is not paid out until their retirement, the amount could be counted as income once it is paid.
The QDRO Process in New Jersey
The length of the QDRO process depends on the cooperation of the parties. Often, it is done following the divorce proceeding if everything is resolved in terms of how everything is going to be distributed. As long as all parties are cooperative, the QDRO process is relatively brief. A seasoned local attorney can walk someone through every step of the QDRO process.
What normally happens is that the actual companies or employers prepare the QDROs under the oversight of each party’s attorney. The parties sometimes will make changes to the order, and once it is finalized, the attorneys will submit the order to the court.
Overall, this could take several weeks or months, depending on if parties are cooperative and if there are complications in the process. If one party is causing issues, this can take far longer because the recipient may have to go back to court to enforce their rights, which can prolong the process.
Consult with an Attorney about Qualified Domestic Relations Orders in New Jersey
Retirement plans have significant value in a divorce. It is important to work with an attorney who understands the significance of these assets and will work with you to seek a qualified domestic relations order in New Jersey.
If you are pursuing a divorce where one partner has retirement assets, a QDRO can provide financial security for the future. Reach out today to discuss QDROs with an experienced legal professional.