For divorcing women, there’s good news and bad news. The good news is that women are closing the financial gap that once equated divorce with poverty. The bad news is that, according to a recent study, divorcing women still lag behind men in their knowledge of financial issues instrumental to their post-divorce financial health.

One of these items is a QDRO — a “Qualified Domestic Relations Order.” This is a legal tool that divides a pension or other pretax asset so that a former spouse can receive a portion of benefits accumulated by the other spouse during a marriage. The court enters a QDRO so that the couple’s pension plans, whether an IRA, 401K, or other tax deferred plans are divided fairly when these assets go into pay status. The QDRO instructs the Plan Administrator to divide up the benefits in the future.

It is important to know that a QDRO does not apply to government, police or military pensions, which have their own system and are designed to provide benefits to only one person. There are ways to secure a non-participant former spouse’s share, but they have to be done carefully, timely, and right.

Generally speaking, both spouses are entitled to share in the benefits of each spouse’s pension and other pretax benefits upon retirement. Here are some pitfalls that make it extremely important to have a well-experienced and qualified attorney file your QDRO, either along with your final divorce documents or as soon thereafter as is practicable:

• There is complex QDRO language that may cause one spouse to lose benefits if it is not prepared correctly.
• The QDRO should be filed as quickly possible, because if the spouse owning the qualified plan dies before divorce proceedings are completed, then the non-participating spouse may not be entitled to any portion of the benefits.
• If the owner of the plan relocates to another company, the Plan Administrator may not be forthcoming with information related to an ex-spouse’s pension plan. With a QDRO in place, the agent is legally obligated to divulge all information related to the pretax plan.
• In some cases, divorcing spouses choose to swap a different asset for a future benefit payment. A family law expert should describe that exchange in the divorce agreement.
• We have handled many cases in which a former spouse many years after the divorce still has not gotten his or her proper share of the QDRO assets.  We can resurrect the process, whether by negotiations or litigation, yet the sooner you come to us, the better off you will be.

Many people in the process of divorce are too overwhelmed with changes and stress to pay attention to details such as these. If you are getting divorced, you may need a QDRO. If you are not sure, we invite you to consult with us. At Hanan M. Isaacs, P.C., we take care of the details routinely, promptly, and well, so you can focus on starting your life anew. Call 609-683-7400 to make an appointment at our Somerset County law office. We offer a reduced fee initial consultation.  We accept all major credit cards and have flexible hours for your convenience.