One of the assets that couples end up fighting most about when they divorce is investment accounts. One of these reasons why they do so is because they often have fluctuating values, so it’s really hard to hone in on a particular value for them. There are also tax implications associated with taking on or divesting yourself of certain investment assets. These are some of the reasons why individuals who have these types of accounts seek to have a Qualified Domestic Relations Order (QDRO) drafted up in their case.
A QDRO is a type of court order. It allows a secondary payee to receive access to assets contained in a retirement plan account aside from its owner or original designee. It’s only considered to be valid if it complies with both the Employee Retirement Income Security Act of 1974 (ERISA) and Florida domestic relations laws.
The document contains certain pieces of information to be considered as valid. The QDRO must include the names of each plan and what percentage of each should be earmarked for each alternate payee. It should also list the names and contact info for both the actual plan owning spouse and the payee. The QDRO should also list validity dates, including how many payments should be made.
It’s important to note that an alternate payee must be either a child, an ex-spouse or other dependent. The onus ultimately falls on the plan administrator to determine if all of the required guidelines have been met to make a payout to an alternate payee.
Many divorcing spouses find it beneficial to get a QDRO when they decide to split up a retirement account. They do because it allows them to withdraw money from their retirement plan without having to meet certain age requirements. It also allows them to do this without including a 10% penalty fee for making an early withdrawal.
Splitting up assets in a divorce is never easy. Dividing up complex ones such as investment accounts introduces a whole other level of complication. An attorney can help you broker a deal with your Florida ex about how to best split up what you own and aid you in drafting a QDRO, if necessary, in your Fort Myers case.