Asset division between spouses is often a complicated part of divorce in Texas. The court must divide everything that is subject to a split equally between spouses, including your retirement benefits. As such, the judge will assign QDRO to oversee this division. Here’s what you need to know about QDRO.
What is QDRO?
QDRO is an acronym for qualified domestic relations order. It is a decree given by the court that gives your spouse the right to receive a portion of your retirement benefits. In other words, if you are the one with the retirement accounts, QDRO forces you to give your former spouse part of it.
This court order contains the name and address of people involved, the types of retirement benefits that you must split, the amount the other spouse gets, and the time period in which he/she gets it. So before an administrator divides your assets, they must see to check if QDRO is indeed “qualified.” This means that the Texas family court reviewed the order and accepted the retirement plans that you must split.
Retirement benefits subject to division
Retirement benefits subject to division in Texas divorce include:
- Individual Retirement Accounts (IRA)
- 401(k) accounts
- Deferred compensation accounts
- Other retirement plans that you have
You should note that you cannot use QDRO if your spouse is working for the federal government. They are only applicable to people in the private sector. People in the government sectors will use Court Order Acceptable for Processing (COAP).
Purpose of QDRO
In Texas, it isn’t a must that you use QDRO to separate retirement benefits, but it is often your best course of action. For one, it can help you get your lawful share of your ex-spouse’s retirement benefits, especially if they are set to retire many years from now. Further, QDRO can help you avoid tax consequences when receiving your share of the retirement benefits.
People also love QDRO because of the freedom they get from getting their share. You don’t have to rely on your ex to make monthly payments to your personal accounts; you will get it directly from the provider.
In Texas, marital property is divided equally between spouses. If you want to get what you lawfully deserve and in the best possible way, QDRO can be your best course of action.