Pursuant to Oklahoma law, a divorce requires the equitable and fair division of all marital property, assets, and debts. This division of course does not include property, debts or assets that were acquired prior to the marriage, that were acquired as a gift, and that were acquired after the parties separated.
This division of property does include an individuals retirement account, whether it be a pension, a 401k, or an IRA. All property must be divided fairly. A lot of times, the lawyers will try to balance the debts and assets, so that one person will assume the majority of the debt and can keep the majority of their assets, avoiding having to split any retirement accounts. However, should a retirement account have to be divided requires the drafting of a separate document called a Qualified Domestic Relations Order or more commonly called a QDRO.
The purpose of the QDRO is to divide a retirement account in to two separate accounts or in the case of a pension, assign a percentage of the pension to now ex-spouse as an alternate payee of the plan.
When a retirement account is divided by a QDRO, it actually creates to separate accounts. One for the account holder and one for the ex-spouse. This allows one party to either cash out their portion, paying separate penalties and taxes, while allowing the account holder to continue contributing to his portion of the retirement account.
The difficulty in QDROs and why it is important to have one drafted by a lawyer is that each company will have their own requirements as to acceptable language. Additionally, the lawyer needs to be sure that the QDRO complies with federal and tax laws. While the Judge has to approve the QDRO, it is ultimately the retirement account company that will allow the QDRO to take effect. While it’s uncommon, companies may at times reject a QDRO because the language does not meet their standards, requiring the parties to sign a modified QDRO, and have the Judge approve the new document, before it being submitted once again to the
If you would like to speak with one of our Divorce and Family Lawyers at the Family Lawyers Group call 918-742-3555 or on the right side of this page send an email to ask a tulsa family law attorney a question.