How Do You Use a QDRO Form for Your 401(k)?


Quick Answer

A person, usually an ex-spouse, making a legal claim to a retirement account uses a qualified domestic relations order, or QDRO, form to initiate the claim in court, as Bankrate explains. The Employee Retirement Income Security Act of 1974 includes QDROs as a means for ex-spouses to claim a portion of pensions, 401(k) plans and other qualified accounts.

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Full Answer

If written and filed properly, qualified domestic relations orders are usually processed within a few months, but claimants should file them along with their divorce decrees, advises Bankrate, Mistakes on the forms or other disputes may delay processing of the QDRO beyond the date of the divorce. People who file QDROs should watch the balance in the disputed retirement account to ensure that an ex-spouse is not making unauthorized withdrawals or transfers. If a spouse makes withdrawals during a pending QDRO, the ex-spouse who filed the claim may be entitled to a larger portion of the remaining balance of the account, or they can lay claim to whatever was purchased using the withdrawn funds.

Those involved in a QDRO should stop making contributions to their retirement accounts during the court proceedings, according to Bankrate. Money that hasn't been added to the account is not generally considered a marital asset, but individuals should consult their attorneys before they cease contributions. Once an account is split based on a QDRO, the spouse who filed the forms then has an account managed by the same company that manages the ex-spouse's account.

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