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.