Annapolis Qualified Domestic Relations Order Attorneys

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Qualified Domestic Relations Order Attorney in Annapolis

In any divorce case in which a party has retirement accounts, the court will usually divide such accounts in the same way that it divides other marital property. However, unlike the division of other property, after the court divides retirement accounts, more work must be done. The parties must subsequently prepare separate orders that put such division into effect.

For legal reasons, financial institutions will not cooperate with the division of retirement accounts without a court order. For example, even if a divorce decree states that “Wife shall give Husband half of her 401k”, the financial company that handles such 401k will disregard such division unless it receives a separate court order. Such a court order is usually called a Qualified Domestic Relations Order, or QDRO (pronounced “qua-dro”). The order may also be called a Court Order Acceptable for Processing. For any such order, the process is similar. After the court enters a divorce decree that divides the accounts, the parties are responsible for drafting any necessary orders that put the division into effect. After the parties draft such orders, the court will sign them, and the parties must then serve them upon the financial institutions, which will then divide the retirement accounts accordingly.

Do not try to represent yourself.

QDRO’s and other retirement orders are legally technical documents. Drafting them properly, obtaining the court’s signature, and serving them upon the proper financial institution requires a substantial amount of work and organization. An experienced divorce attorney is usually necessary. Choosing to undertake such process without an attorney is risky because there is a likelihood that the order will be deficient. Such a choice may result in the process taking much longer than otherwise. If you require the drafting of a QDRO or similar retirement order, you should definitely have a trusted attorney on your side who can help you.

Hire a skilled and aggressive attorney.

Patrick is not like other QDRO attorneys. Patrick has a boutique legal practice in which he provides high quality service to a small number of clients. His practice is small, and that is how he likes it. He is the only attorney in his office. Having a small practice allows Patrick to provide a highly personalized service in which he gets to know each client and delivers representation that is tailored to achieve that client’s unique goals. He has spent the last 14 years handling divorce cases, many of which involved the division of retirement assets. He is aggressive while also being careful to avoid wasteful efforts and strategies that usually serve only to increase the client’s legal fees. Patrick directs his efforts in a focused and intelligent way on things that are most important to the client and that are calculated to bring results. He invites his clients to participate meaningfully in setting the case direction, he is friendly, and he is responsive.

Tax Consequences

Removing money from a retirement account usually has income tax consequences, however, transferring money using a QDRO or other retirement order results in such transfers being free of income tax consequence to either party.

Pension

A QDRO or similar order is always required to divide a pension. A pension is a retirement account that will provide one party with monthly payments of an unknown amount at an unknown future date. The QDRO will usually specify that the second party will receive a share of such payments on an “if, as, and when” basis. This means that the second party will receive a share if the first party receives such payments, as the first party receives such payments, and when the first party receives such payments. In addition, the QDRO will usually specify the mathematical formula that the financial institution must use when dividing the pension payments. Such formula is usually based on the Bangs formula, which Maryland courts use to calculate the fraction of the pension that is attributable to the first party’s employment during the marriage.

401k

A QDRO or similar order is usually required to divide a 401k. A 401k is a retirement account that is similar to a savings account, the current value of which is known. A 401k is associated with one party’s employer and often receives employer contributions into such account. The QDRO will usually specify that the second party will receive a fixed dollar amount or a percentage of such 401k. The QDRO will usually direct the financial institution that is handling the 401k to transfer such amount into whatever account the second party directs.

Thrift Savings Plan (TSP)

A QDRO or similar court order may be required to divide a TSP. A TSP is a retirement account that is associated with one’s employment with the Federal government. A TSP is very similar to a 401k.

Individual Retirement Account (IRA)

A QDRO or similar court order may be required to divide an IRA. An IRA is a retirement account that is similar to a savings account, the current value of which is known. An IRA is not associated with a party’s employer. Although a QDRO may be required to divide such an account, financial institutions are free to divide such accounts without a court order. Nevertheless, some financial institutions may still insist on receiving a QDRO. If a QDRO is required, such QDRO will usually specify that the second party will receive a fixed dollar amount or a percentage of such IRA. The QDRO will usually direct the financial institution that is handling the IRA to transfer such amount into whatever account the second party directs.

QDRO’s are complicated.

QDRO’s and other retirement orders are complicated. They are legally technical documents that require a substantial amount of knowledge and skill in order to draft properly. In most cases, only an attorney has the necessary skill to effectively draft such a document.

Contact Patrick Crawford today.

Patrick is an experienced Annapolis Qualified Domestic Relations Order Attorneys ready and eager to represent you in the drafting of any QDRO or other retirement order that you may need.

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