One of the things you may need to divide in your divorce is your employer-sponsored retirement plans. That is if you did not exclude them from division in a prenuptial agreement.
You might only be able to claim a share of some of your spouse’s entire retirement plan rather than the whole amount — it depends on when they began it. Funds contributed before your marriage remain separate property and are exempt from division in a divorce.
What is a QDRO?
A QDRO is a qualified domestic relations order. It is something you ask a court for. You can request one to ensure you get a fair share of your spouse’s pension plan in a divorce. If approved, you will be able to withdraw a share of money from their plan and put it into your own. If they get one, they would be able to do the same. By transferring money at the time of the divorce, you avoid the risk of future problems such as the pension plan paying your spouse and ignoring you.
You may not need to take out a QDRO, even if you can. Remember that pension plans are only one of the assets you own as a couple. You may find it simpler to seek compensation in other ways when dividing property in a divorce. In exchange for allowing your spouse to keep their retirement plan intact, you could take other assets to equal the value of your share.
It is easy to focus on the immediate future when divorcing. Yet you have your whole life ahead of you. Negotiating a fair divorce settlement helps you gain financial independence and build for your retirement.