A QDRO is a legal document that is needed in order to transfer assets between a husband and wife from an ERISA-governed retirement or pension plan. A QDRO is a very important document with many considerations and implications that need to be dealt with BEFORE the divorce is final.

If your spouse has a pension plan, and you negotiate to receive a portion of it, a QDRO needs to be written in order to effectuate the transfer. There are many things to consider when negotiating a QDRO: are you going to be named surviving spouse, if your spouse dies before either of you start to receive your portion of the pension? Are you going to receive a portion of the COLA, supplements or subsidies? Are you going to "share" in your spouse's benefit or receive your own "separate interest?" As you can see, the QDRO is not a neutral document, and if you are the one that is going to benefit from the QDRO, your attorney should be the attorney who takes the responsibility of having the QDRO written.

All of these decisions need to be negotiated and decided upon BEFORE the divorce is final. If they are not, and you get divorced and no QDRO has been written, and your spouse, the Plan Participant, dies, you will very likely receive nothing. That is because ERISA is a federal law and the Plan Administrator has final approval. Your domestic relations order needs to be negotiated and written in the divorce process, filed with family court coincident to your divorce and then sent to the Plan Administrator for final approval.

Janet Bouma has been teaching QDRO drafting and review to other Certified Divorce Financial Analysts nationally. Although she is not an attorney, she can work with your attorney and draft the QDRO for your attorney, making sure your interests are protected and your intentions are represented.