PRACTICE AREA

Description

QDRO Attorney Spartanburg, South Carolina

Divorce is hard under any circumstances, but when it comes to retirement accounts, things can get a little more tricky.
Do you know how the funds that people accumulate for their retirement, sometimes for many years of their marriage, are split? This is where the intricacies of a Qualified Domestic Relations Order, or QDRO, arise to the surface.

What is a QDRO?

A QDRO or Qualified Domestic Relations Order is a document that is used to partition the retirement benefits between separating spouses.

It is a legal document that is provided by a court and signed by the retirement plan administrator to determine how a portion of the retirement benefits of one spouse should be split with the other spouse mainly in cases of divorce.

The principle goal of a QDRO is to address the distribution of retirement benefits which is usually one of the biggest marital properties.

Unlike other forms of property that can be divided, retirement benefits are well guarded by federal laws like the Employee Retirement Income Security Act (ERISA) and as such, a
QDRO has to be made for the benefits to be divided.

Why QDROs are Necessary?

QDROs are important because they act as guidelines that outline how the retirement assets are to be split while observing the retirement plan provisions and federal laws. Plan administrators are not allowed to make payment to any person other than the plan participant in the event that there is no QDRO. 

This implies that even where a divorce order provides that retirement benefits should be split, the benefits cannot be transferred or split without a valid QDRO.

However, QDROs are intended to preserve the rights of both spouses in terms of their financial rights. They make sure that the non-employee spouse gets the proper portion of the retirement assets as provided for by the law without having to pay penalties or taxes that may be associated with early withdrawal or improper spitting of the retirement assets.

Types of Retirement Plans That Typically Require a QDRO 

Dividing retirement assets during a divorce often requires a Qualified Domestic Relations Order (QDRO) for specific types of plans. Some common plans are discussed below:

Pension Plans: These are also referred to as defined benefit plans, pensions guarantee a fixed amount to be paid to the individual at the end of their employment career. A QDRO is employed to assign a segment of this future benefit to the non-employee partner.

401(k) Plans: These are employer-funded, defined contribution schemes where the employee can make a contribution by paying a fixed amount out of his salary matched by the employer. A QDRO is required if one is to split the balance in the account with a spouse without attracting penalties or taxes.

403(b) Plans: Like 401(k) plans, 403(b) plans are provided by public schools, some non-profit organizations, and churches. These plans also need a QDRO for division in the event of a divorce.

Profit-Sharing Plans: These are retirement plans whereby the employees are allowed to participate in the profits of the company. As is the case with any other defined contribution plans, a QDRO is required in order to properly divide the above funds.

Thrift Savings Plans (TSPs): This is a defined contribution savings plan for federal personnel and members of the uniformed services. In the case of a divorce, a Thrift Saving Plan (TSP)  requires a Court Order Acceptable for Processing (COAP). 

A Court Order Acceptable for Processing (COAP) is a legal document used to divide a federal employee’s retirement benefits, specifically those in a Thrift Savings Plan (TSP), during a divorce. 

Payment Options for Alternate Payees Under Laws in Spartanburg, SC

The South Carolina Code Section 9-18-20(A) gives direction on what types of payments can be made by a plan to an alternate payee under a QDRO. 

  • Retirement Benefits

Retirement benefits are monetary benefits that are given to the participant once they retire. In accordance with a QDRO, a part of these benefits can be paid to an alternate payee, who is most often an ex-spouse.

Direct Payment: The alternate payee can get the payments directly from the retirement system once the participant starts receiving retirement benefits. This helps to guarantee that the alternate payee gets a share at the same time the participant is getting theirs.

Proportional Share: The QDRO can also provide that the alternate payee is to share proportionately with the participant each retirement payment as set out by the participant’s benefit schedule.

  • Withdrawal of contribution or Refund

If the participant decides to withdraw or request a refund of his/her contributions to the retirement system, the alternate payee may be entitled to part of the refund.

Lump-Sum Payment: If contributions are refunded, the alternate payee may be paid in a one-time lump sum only. This option is usually exercised when the participant is still active in the workforce and decides to withdraw his or her contributions from the retirement system.

Distribution Flexibility: The QDRO can provide how the alternate payee’s share of the withdrawal or refund shall be allocated and what formula shall be used.

  • Disability Benefits

Disability benefits are given to a participant who is unable to work as a result of a disability that meets the requirements of the law. Under a QDRO, all or some of these benefits can be split between the participant and an alternate payee.

Continued Financial Support: The participant may receive disability benefits and the alternate payee may receive a part of these payments ensuring that the participant continues to receive support even in the event that they cannot work anymore.

Specific Provisions: The QDRO must explicitly state that disability benefits are to be divided, as these are distinct from standard retirement benefits and require clear legal documentation.

  •  Death Benefits

Death benefits are paid out to beneficiaries when the participant passes away. A QDRO can ensure that an alternate payee, such as an ex-spouse, receives all or a portion of these benefits.

Survivor Benefits: The alternate payee can be designated to receive survivor benefits, ensuring financial security even after the participant’s death. This may include ongoing payments or a lump-sum distribution.

Critical Protection: Specifying death benefits in a QDRO is crucial for protecting the alternate payee’s financial interests, particularly if the participant’s death occurs before retirement.

For personalized guidance on going through the QDRO process and understanding your rights under South Carolina law, don’t hesitate to reach out to us. Call us at (864) 804-6330 to speak with one of our qualified QDRO lawyers and book a consultation.

Alimony and QDROs

Maintenance is a form of support that a spouse has to provide to the other spouse after the dissolution of marriage. A QDRO is also utilized to partition retirement benefits in the same way that alimony may be supplemented or substituted with.

For instance, one spouse may be paid alimony on a monthly basis while the other receives a lump sum of retirement benefits through a QDRO.

Child Custody and QDROs

Child support and custody  in QDRO deals with how the children are going to be taken care of and raised in case of a divorce. Thus, although custody is an issue that is distinct from QDROs, it can be related to it in an indirect way.

For example, a custodial parent may be awarded a portion of retirement benefits through a QDRO to provide for the children’s future.

What to Expect During the QDRO Process in Spartanburg?

The process of obtaining a QDRO starts with an assessment of the situation with your lawyer. In this meeting, your attorney will listen and learn about the case, the circumstances of your divorce, the details of your retirement plans, and your objectives.

Drafting and Pre-Approval of the QDRO

The process of obtaining a QDRO starts with the preparation of the order by the attorney, where the order must adhere to the legal requirements of the state and the plan, if any. 

The next step is to forward this draft to the plan administrator who then scrutinizes it to ensure it meets the rules of the plan. If the draft satisfies the criteria, it is submitted to the court for acceptance. 

The order is legally enforceable as a judge will go through it and approve the QDRO in consideration of the divorce decree and the laws.

Implementation by the Plan Administrator

Once the QDRO has been approved by the court, the form is forwarded to the retirement plan administrator for execution. The administrator will split the retirement assets as provided by the QDRO depending on the provisions of the agreement. 

This may include summing up a definite part of the participant’s retirement benefits to the alternate payee or even opening a new account in the participant’s name. 

The timing and the mode of distribution vary depending on the kind of retirement plan and the conditions stated in the QDRO.

Challenges and Final Distribution

During the process of QDROs, difficulties such as rejections or the need for modifications may appear, and this, of course, takes time. 

It is crucial that all the legal representatives, the plan administrator, and the court are on the same page to reduce such issues. When the QDRO is finally complete and accepted, the plan administrator will send each party a notice of the division of property. 

Documentation and Information Needed for the Process

Gathering the right documentation and information is crucial for a smooth and successful QDRO process. It ensures that all necessary details are accurately captured and compliant with legal requirements.

Divorce Decree: The last legal document that gives an indication of who gets what after the divorce or legal separation; this may include pension plans.

Retirement Plan Information: Information about the specific retirement plan(s) at issue including plan descriptions, participant statements, and contact information of the plan’s administrator.

Personal Information: Both parties’ identification data: full name, Social Security number, date of birth, and telephone number.Employment History: Details of the spouse receiving the retirement benefits including the employment period, and any contribution to the retirement plan, during the marriage.

How Experienced Spartanburg QDRO Attorneys at Max Hyde Law Firm Can Help You

Dealing with the QDRO process can be confusing, but our practiced lawyers are ready to make the procedure as easy as possible for you. Our lawyers have extensive experience in dealing with QDRO cases in Spartanburg, Greenville, and throughout South Carolina. Here’s how our team can provide invaluable assistance:

Expert Drafting and Review

Our attorneys have the expertise in preparing and reviewing QDROs to conform with the legal provisions as well as the stipulations of the divorce agreement. 

We carefully arrange the order to meet all the state and federal rules to avoid mistakes that would cause the retirement plan administrator to reject the order or take a very long time to process it.

Navigating Plan Requirements

Various retirement plans have their regulation and guidelines on how to deal with QDROs. Our team is knowledgeable of the specificities of different plans such as pension plans, 401(k)s, and TSPs. 

We communicate  with the plan administrators to ensure they accept and implement your QDRO and thus, enable a proper split of retirement benefits.

Court Filing and Approvals

We take full responsibility for the filing process of the QDRO and also for dealing with the courts to get the approvals. Our attorneys also make sure all papers are in order and all the requirements from the court are met to avoid any delay and hitch in the approval process.

Addressing Challenges and Revisions

In the event that some complications are experienced in the QDRO process, that is, the QDRO has been rejected or the QDRO administrator has asked for some changes to be made. 

Our attorneys can easily handle such complications and resolve them. We address all communications with the plan administrator and the court to ensure that all the problems are solved in the shortest time possible.

Protecting Your Financial Interests

We fight for your money and make every effort to guarantee you will receive all the money you are owed. 

We explain the legal ways of paying the agreed amount under South Carolina law and strive to have your QDRO reflect the agreed split of the retirement benefits, whether through installment payments, or a lump sum payment.Our lawyers have profound knowledge of South Carolina family law. Contact us today at (864) 804-6330 to book a consultation with one of our divorce attorneys and let us help you QDRO process with confidence.

PRACTICE AREAS

OUR ATTORNEYS

Max Hyde | Max Hyde Law Firm | Family and Divorce Lawyer | Spartanburg, South Carolina

Max Hyde

(864) 804-6330

Samantha Nicholson Larkins | Max Hyde Law Firm | Family and Divorce Lawyer | Spartanburg, South Carolina

Samantha Larkins

(864) 804-6330

LET'S CONNECT

Phone Number

(864) 804-6330

Email Address

max@maxhydelawfirm.com