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When do you need QDRO consultants?

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Quick Answer

QDRO consultants are typically needed during the drafting phase of Qualified Domestic Relations Orders or QDROs, according to attorney Lina Guillen of DivorceNet. The expertise of QDRO consultants is necessary because the process of drafting QDROs requires in-depth knowledge of the ever-changing laws that govern divorce, benefits and taxes. Among other consequences, an improperly drafted QDRO can rob a deserving beneficiary of benefits.

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Full Answer

Generally, the expertise of QDRO consultants is needed during the process of drafting division orders for 457, 403(b) or 401(k) plans, TSAs, ESOPs and select pension and benefit plans, among others, adds Guillen. The wording in a QDRO must be well thought out as a poorly drafted order can lead to an unbalanced division of benefits, loss of benefits or loss of rights. For this reason, many family lawyers prefer outsourcing the responsibility of drafting QDROs to professionals skilled in the task, according to Guillen.

QDROs and thus QDRO consultants are not needed for the division of military pensions and other government pension plans, Individual Retirement Plans and deferred annuities, acording to Guillen. QDRO consultants are also unnecessary in situations where parties to a divorce decide to enter into a buyout agreement. Under this arrangement, the employed partner pays the unemployed partner a lump sum equal to the value of the portion of a plan due to the unemployed partner.

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