What is a QDRO?

On Behalf of | May 4, 2020 | Divorce |

Getting divorced from your spouse in Nebraska can disrupt your plans for retirement. Any savings you have accumulated may potentially drop significantly as courts determine a fair share for each party. 

Ensuring that you have ample opportunity to rebuild and strengthen your retirement plans requires immediate action. A QDRO is one component to consider, especially if your spouse is the person with a company-designated retirement plan. 

Filling out a QDRO 

According to U.S. News, a QDRO stands for a Qualified Domestic Relations Order. This formal document is where you will make a claim to request your portion of the retirement benefits accumulated by your spouse during his or her employment. Because you are not the employee and your name is not directly tied to any retirement benefits, you must complete a QDRO before you receive a payout. 

One thing to note is the importance of understanding the penalties associated with how you choose to use any finances you acquire after submitting your QDRO. While you do have the option of transferring your benefits into your personal retirement plan, understanding the implications will protect you from making costly mistakes. 

Reorganizing your finances 

Divorce will require you to take focused and proactive steps toward reorganizing your finances. The sooner you are able to begin establishing your own credit, controlling your budget and managing your income and expenditures, you can optimize your effort to rebuild a healthy retirement. If you are the recipient of any spousal support, refrain from counting on that money as part of your income. Rather, create your budget based on your income alone to effectively prepare for the possibility that alimony payments are late or delinquent.