When going through a divorce in Kentucky, you will hear a lot of unfamiliar terms, one of which is “qualified domestic relations order.” Your attorney may even recommend that you use a QDRO, at which point you may ask, what is a QDRO? The U.S. Department of Labor explains a QDRO in depth and when you might use it.
A qualified domestic relations order is a domestic relations order that establishes or creates the rights of an alternate payee, or that creates the right for an alternate payee to receive, a portion or all of the benefits related to another person’s retirement plan. Before you automatically decide that a QDRO is not right for your situation, know that courts may issue such an order for the benefit of both parties.
If you or your spouse has a substantial amount of money in a retirement account, the courts may issue a QDRO for the payment of child support, spousal support or in lieu of marital property. Retirement accounts are notoriously difficult to value and divide, especially if an account has yet to mature. To ensure the fair distribution of all assets, a judge may decide that all or some domestic relations payments come from a retirement account rather than the payor’s income.
In most cases, the alternate payee on a QDRO is a former spouse, and QDROs are generally the result of property division proceedings. However, in some cases, a family law judge may assign a child or other dependent as the alternate payee of a QDRO. The courts do not need the approval or endorsement of either party to create and put into order a QDRO.
