At the Law Office of Philip J. Schipani in Florida, we know how difficult your life becomes when you begin going through a divorce. In addition to whatever issues you and your spouse may have with regard to your children, you may also have issues with regard to your property division. This is especially true if both of you have retirement accounts that make up a large portion of your overall assets.
Reuters reports that splitting up retirement accounts, particularly pensions, is a tricky undertaking at best. At worst, it can cost you and/or your spouse thousands of dollars in taxes and penalties if you do it wrong.
What you likely need for each pension is a qualified domestic relations order. The reason why you need a QDRO for each pension is that there is a good possibility that each one has its own unique rules. If you and your spouse do not follow these rules, you could face severe financial consequences. For instance, some pensions disallow an ex-spouse from receiving further payments if (s)he remarries, regardless of what the divorce decree says. Others disallow an ex-spouse from receiving anything if the person whose pension plan it is dies after the divorce but before a QDRO is in place.
Most pension plan administrators have a model agreement form that you can obtain and use as a guideline. Even with this, however, your best strategy when drafting your property settlement agreement is to send a copy of the proposed agreement to each pension plan administrator for his or her review. This should catch any inadvertent incorrect language that you need to change before signing it.
For more information on this subject, please visit this page on our website.