It’s easy to think of “property” in terms of real estate, cars, furniture, and even bank accounts. But what about retirement plans? If you are going through or potentially will be going through a divorce, it is important to know that during divorce proceedings, all property accumulated during the marriage gets divided by the end of the process, either by agreement of the parties or after a trial.
Simply put: Dividing retirement plans can get complicated and tricky, and not all attorneys have the experience or desire to prepare a Qualified Domestic Relations Order (QDRO), or other orders to divide retirement accounts. At Fry & Elder, our attorneys are happy to review your final decree and prepare your QDRO. Accomplished child support and family law attorney Amy Page recently completed an advanced family law seminar through the American Academy of Matrimonial Lawyers and has provided some additional information you will want to know about dividing retirement plans.
The process and importance of dividing retirement plans
If your spouse or you worked during your marriage and contributed to a retirement or pension plan, your attorney will need to know some facts about those plans. Some questions to expect would be:
- When and for how long did you or your spouse work for that employer?
- Are you or your spouse still employed there?
- What are the provisions of the plan regarding time periods for vesting?
- Are there any outstanding loans against the plan?
Retirement plans can be valuable bargaining chips when negotiating a property settlement. There are certain tax advantages and ramifications based on how those assets are divided. Any property settlement that includes retirement benefits should fully explore the tax ramifications for the person paying or receiving retirement benefits as part of the agreement. It’s often advantageous for a party to give up other, more easily transferable assets and keep his or her retirement account intact. This is definitely a discussion to have with an experienced divorce attorney. If your case goes to trial, the tax treatment of divided retirement benefits can support your attorney’s theory of why the benefits should be awarded in a specific way.
Why the division of retirement benefits should include a QDRO
The final decree for a divorce including division of retirement benefits should include specific provisions about that retirement plan. It should provide for the time period of retirement benefits that accumulated during the marriage, as well as provide for how any gains or losses on the benefits will be handled in the time period between the final decree and the time the account is actually divided by the Plan Administrator. Finally, the decree should provide for the preparation and entry of a Qualified Domestic Relations Order, or QDRO, which is an order that tells the Plan Administrator to divide the account according to the decree. The QDRO provision in the decree should include a plan for who is going to prepare the QDRO and who will pay the expenses involved with the Plan Administrator’s review of the QDRO.
Dividing retirement plans can be especially complicated in cases where the retirement plan is provided by a state agency or the federal government or military. Special documents and language are required that meet the agency’s requirements. For military retirement benefits, a Military Retired Pay Division Order must be completed, filed in the trial court, and forwarded to the appropriate authorities. Similarly, to divide a federal employee retirement account (FERS), a Court Order Acceptable for Processing is required.
Experience the Fry & Elder Difference
For nearly 50 years, Fry & Elder has been a name synonymous with Oklahoma family law. The firm has been named to the U.S. News & World Report’s exclusive Best Law Firms list from 2014-2017 Our team of attorneys are some of the most decorated in the state and include:
- Two 2018 Best Lawyers® Selections
- One of only 19 attorneys in the state to be a Fellow of the American Academy of Matrimonial Lawyers
- Best Lawyers® Lawyer of the Year for Family Law in Tulsa 2016
- The 2016 Oklahoma Family Law Attorney of the Yearby the Oklahoma Bar Association Family Law Section
- Five attorneys recognized by Super Lawyers®
- Four attorneys AV® Preeminent Peer Review Rated by Martindale-Hubbell®
- Three of the past four Oklahoma Bar Association Family Law Section Chairs
- A Cherokee Nation District Court Judge