Can a QDRO be prepared before a divorce is finalized? Yes, it can be done. However, this can result in costly delays and in extreme cases loss of benefits.
Richard D. Johnston answers:
A: In many cases, we are engaged to prepare a QDRO after the divorce has been finalized. However, this can result in costly delays (both emotional and financial), and in extreme cases loss of benefits. We encourage attorneys to prepare or have the QDRO(s) prepared once a settlement has been reached so that the document(s) can be signed and entered with the Divorce Decree or Settlement Agreement. It is generally much easier to get the participant’s signature on the QDRO and the Divorce Decree at the same time. After the Divorce Decree or Settlement Agreement has been finalized, many participants can be difficult to locate.
If the Divorce Decree is finalized without the completion of a QDRO, and the participant dies before a QDRO can be entered and accepted, an alternate payee’s awarded benefit may be forfeited or at the very least require further action to determine whether the alternate payee may receive his/her benefit.
Richard D. Johnston, Jr. operates QDRO Services, LLC in The Woodlands, Texas. The company was formed in early 1996 for the purpose of assisting attorneys and their clients with the division of retirement benefits and a QDRO solution when it is necessary.
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