No one wants to make QDRO mistakes when dividing retirement plans in a divorce. Retirement plans are typically among the most valuable assets in the marital estate. A QDRO, or qualified domestic relations order, is a method of dividing a retirement plan. QDRO mistakes may be costly. Still, retirement accounts typically contain pre-tax dollars that are not as valuable as their face value. In Chapter 13 of my book, we examine how to control the tax consequences when retirement assets are divided. It is important to avoid QDRO mistakes like these when dividing retirement assets in divorce.
Don’t wait until you are drafting the QDRO to get the information you need to avoid QDRO mistakes. By taking the time to investigate and resolve these issues before the settlement is final, you will encounter fewer QDRO mistakes down the road. When you understand the details of the retirement plans, you can negotiate a settlement (or win at trial) in a way that will properly divide the assets, without coming back to haunt you long after the divorce is over.