{3 minutes to read} Why should you have a professional draft the QDRO instead of doing it yourself or, for that matter, having a general practice attorney do it? There are a lot of details that go into dividing up any kind of pension or retirement plan.
Without a doubt, the most complicated aspect is dividing up a monthly pension to be paid at some date in the future. First, should the order provide for a shared or a separate interest? Separate interest means the other person can collect whenever they’re eligible. Shared interest means they have to wait until the employee actually retires. Which is the better choice? A professional can help you sort this out.
Another complication to consider are the options offered by many pension plans when someone retires, which typically continue to provide for a surviving spouse after the death of the employee. This results in a reduced payment for the entire life of the pension, but it provides payments that continue for two lifetimes. When people are getting divorced, selecting this type of survivor benefit is very important. Many plans offer different varieties of this particular option. Some of them pay the same amount to the survivor while others pay half of the monthly amount to the survivor. Another critical question that often gets overlooked is who pays for this reduced payment? It can be shared or it could be taken off one party’s monthly payment.
Some plans have cost-of-living adjustments that increase the pension every year or so, based on inflation. Who gets the cost-of-living adjustment? In relatively simple plans such as 401(k)’s and 403(b)’s, if all of the money was earned during the marriage, splitting it equally is a no brainer. But in other scenarios, if some money was earned before the marriage, and some was earned after the marriage was over, great care has to be taken to see that the split is based only on that portion earned during the marriage.
All of these issues can be handled, but sometimes it’s more than the average person can do themselves. And doing it yourself without a clear understanding of the ins and outs of the process can cause you to possibly end up cheating yourself or losing money.
If you would like the help of a professional to draft your QDRO, please give me a call.
Steven L. Abel, Esq.
101 South Broadway
Nyack, NY 10960
(P) 845-638-4666
(E) [email protected]
