Complete the retirement process right after a divorce

Under Michigan law, retirement plans are part of the equitable distribution of marital assets. But in a recent Michigan case, a former wife’s delay in getting a Qualified Domestic Relations Order (QDRO) drafted and processed cost her dearly.

The wife waited until after her former husband’s death to submit a QDRO related to his pension. The party complaining about the late submission was the former husband’s employer, who wanted to return the proceeds of the pension to the plan. There were no other surviving beneficiaries qualified for benefits. The court invalidated the QRDO, and the wife lost her husband’s retirement benefits.

There are many reasons for delays in submitting a Qualified Domestic Relations Order to the court.

  • Some people chose to represent themselves and are not aware that retirement plans can be divided pursuant to a divorce.
  • Retirement plans may say you can do the QDROs yourself, but process is complicated. My clients who have tried to do it themselves have called me to complete the process.
  • The language used for QDROs is based on employment law and is hard to understand.
  • Because QDRO’s represent an exception to the Internal Revenue Code, there are strict rules for processing the transfer of the funds. The language in the QDRO’s has to be precise.
  • People get frustrated with the complexity and the amount of time involved in getting QDROs done properly.
  • Some clients do not understand that having the retirement funds transferred involves a separate process from getting a divorce.

Our firm does not draft QDROs because they are governed by employment law. Instead, we will refer you to professionals with employment law knowledge and experience. We help you assemble the documentation and submit it to the preparer. We then have the QDRO entered by the court after everyone signs it and manage the process of having the QDRO accepted by the plan administrator. If there are problems, we make sure that the QDRO is redrafted to meet with the plan’s requirements.