One of the most common concerns one may have during a Virginia divorce is how this process will affect long-term plans and savings. Divorce requires the division of all marital property, which will include retirement accounts and other types of funds. Depending on the nature of the specific types of retirement funds the spouses have, it may necessary to draft a qualified domestic relations order. This is a document used to divide certain retirement assets.
QDROs and what they mean
A QDRO mandates the distribution and division of money held in certain types of accounts, such as a 401(k). While it is not necessary for every type of account, it is often necessary for spouses who hold private pension accounts, as well as employee stock ownership plans, defined benefits plan and more. The intent of a QDRO is to ensure the parties each receive their portion of these marital assets as decided by the court or negotiated agreement.
QDROs offer some measure of protection for both parties. Because it is a court order, it ensures that spouses get the exact amount intended. It enforces fair treatment of the retirement assets, as well as ensuring that each spouse can access funds. It may help to remember that a divorce decree is separate from a QDRO.
A fair settlement
A fair property division settlement may only be the first step for a Virginia spouse. It may also be necessary to seek a QDRO for certain types of accounts. A spouse may consider what steps will be best for his or her long-term savings and retirement plans.