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tabitha95 posted 6/30/2013 02:17 AM

It looks like I'm going to need to do this for my share of EX's retirement.

Any advice? Does EX have to file ones too?

I only get his current retirement. I didn't go after his first retirement and he didn't go after mine, so there will only be the one account.

newnormal posted 6/30/2013 08:40 AM

Im looking forward to more experienced posts to come too.

Im in the middle of this. I do know that my lawyers assistant is well versed on this and has all the local companies forms. I kinda know there is tax implications for the receiver, like income tax. I do not know if there is any way to mitigate the tax. I do know that the marital agreement specifying qdro details must be filed before the d hearing and then the qdro moves forward. In essence, you can't move any money until after the d

newlysingle posted 6/30/2013 09:05 AM

I'm interested in this too. We are about to go through as the divorce should be finalized soon. I don't really understand it.

tabitha95 posted 6/30/2013 11:59 AM

My divorce has been finalized over a year. The documents explain what retirement I get and said I may be responsible for the qdro. Well I contacted his retirement and they said I need one.

Since it explains it in the divorce, I don't think its too late.

I haven't heard about the taxes.

tabitha95 posted 6/30/2013 12:03 PM

Do you mean taxes when the money is paid out? Ex's retirement is state run. I won't get a payout. I will just get to collect a monthly amount at retirement age is my understanding.

ruinedandbroken posted 6/30/2013 12:09 PM

I had to do two Qdro's for x's two retirement accounts. (One was a 401k and the other was a state pension) It's pretty complicated so you will need an attorney to do it for you. It costs $$ as well. I think I paid something like $300 for each of them. Your attorney can explain the details. I'm so clueless when it comes to all that financial stuff.

Take2 posted 6/30/2013 12:27 PM

My X has a state retirement.

The qdro stipulates that upon retirement I will get 50% of the monthly retirement check. That is 50% of 20 years contributions made during the marriage. This includes colas.

From the Irs:

A spouse or former spouse who receives QDRO benefits from a retirement plan reports the payments received as if he or she were a plan participant. The spouse or former spouse is allocated a share of the participant's cost (investment in the contract) equal to the cost times a fraction. The numerator of the fraction is the present value of the benefits payable to the spouse or former spouse. The denominator is the present value of all benefits payable to the participant.
A QDRO distribution that is paid to a child or other dependent is taxed to the plan participant.
An individual may be able to roll over tax-free all or part of a distribution from a qualified retirement plan that he or she received under a QDRO. If a person receiving QDRO payments is either the employee's spouse or former spouse (not as a nonspousal beneficiary), then he or she can roll it over, just as if he or she were the employee receiving a plan distribution and choosing to roll it over.

So there are some options as to what to do....and I'm still wrapping my head around it.

This was the most complex issue during my D. We jointly hired an expert to write it up. My atty. sent me copies of each and every step so far (signatures, acknowledgement of receipt by the Retirement Board and the Court... etc.

Check out qdro's divorce through the irs site for more info.

[This message edited by Take2 at 12:30 PM, June 30th (Sunday)]

missmydogs posted 6/30/2013 12:45 PM

I am doing the QDRO for a 401k right now. I am opting for a lump sum payout now. They tax it at 20% right off the top. My lawyer is doing mine so hopefully it should be done in a month or so.

I can't wait! The waiting is sooo long!

miadianna posted 6/30/2013 14:30 PM

Mine was done pretty easily. At the end of the divorce I got a letter to sign to automatically roll my portion into a new account with the same company (if I wanted) and then I got a letter that it was all done. I didn't like the attorney fees attached to rolling it over but there is nothing I could do about that. XH has his own account and I have mine in my own name.

Your lawyer handling the divorce should know about this, it is done all of the time. If it's rolled into a new account, you won't get charged any fees or fines other than from your attorney to do it.

alphakitte posted 6/30/2013 17:05 PM

Missingmydogs, you should check with a tax accountant. 20% is withheld, but you may owe more than that in taxes. You may also owe state income taxes on the distributions.

All dollars taken out of the Qualified Domestic RollOver are taxabe income, both Federal and State, plus another 10% penalty if taken prior to your age 59 1/2.

Phoenix1 posted 6/30/2013 18:14 PM

The one thing about QDROs to watch out for is that they must be approved by the Plan Administrator. It doesn't matter what your court order says, the actual QDRO must have Plan Administrator approval or it can be ignored and you can be screwed.

In our state any QDRO must be drawn up and receive Plan Administrator approval before the divorce can be finalized. That is specifically to prevent the receiving spouse from being screwed over after the fact.

Grace and Flowers posted 6/30/2013 20:07 PM

Actually, alphakitte, the 10% penalty does not apply to QDRO distributions. If you elect to withdraw the money rather than roll over into a new plan, you simply pay the taxes on that money. As you would do if you waited until retirement to withdraw.

QDROs cannot be done until the D is final. Each retirement plan, pension, etc., is different. Each has its own Plan Adminstrator. Any D lawyer should be able to draw up a QDRO. It cost me $500 for two was a 401k in WXHs current job, the other a small pension from an old job. I reinvested the 401k money in my own account. I cashed out the pension because it was small, and precisely because the 10% did not apply!

This allowed to do some home repairs and pay off some debt.

They really are not mysterious...just another thing to check off the list. Oh, and also....if you elect to just roll over the monies, no taxes are taken out, obviously.

[This message edited by SadMad2012 at 8:07 PM, June 30th (Sunday)]

homewrecked2011 posted 6/30/2013 21:23 PM

First, it took about 3 months to get the qdro finished. Here's what I understand:

atty types it up.
sends to XH atty.
sends to judge.
Gets back from judge
sends to XH CFO at his company (plan administrator) was either him or the inv company, I cant' remember.
Then comes back to atty.
Then, atty had me fill out a paper of how I wanted the $$ dispersed,
then it went to Investment company.
Then I got the check.

If you have chosen to have the $ reinvested at your local bank into an IRA rollover, they may send the check to the IRA department and that might take 2 weeks to get your acct with the $ deposited.

SadMad is correct, as I called 3 different IRS agents and spoke to the supervisor regarding the 10% penalty for the withdrawal. IF you take the check directly from the invest company and just depo in a regular acct, you do not pay the 10% penalty because it is coming from a qdro. BUT if you take the money from the qdro and put it into an IRA rollover or work 401K, then if you take the w/d at any time b4 age 59&1/2, then you DO pay the 10% penalty.

And yes, any amount you with draw is claimed as income for that year. However, because I didn't work much last year (stress of D) I chose to make the w/d in 2012, pay the taxes and I'm done with the hassle, the money is in a regular CD.

To further confuse things, lets say you took the $$, but now you realize you don't need it all, you can make a contribution to an IRA or 401K if you are working, and that deposit will come off of your total income for the year.

[This message edited by homewrecked2011 at 9:26 PM, June 30th (Sunday)]

tabitha95 posted 6/30/2013 23:06 PM

One more question. Is this time sensitive? EXs plan does not allow early withdrawl, so he can't do anything for another 11 Years minimum.

If he can't pull out there money, is it worth rushing?

Take2 posted 7/1/2013 08:30 AM

It is part and parcel of my D. The judge was notified and approved waiting on it due to the complications, so that we could have an expert draft it.

But - it is important to do it soon, I suspect, if it works the way the X's does.

Upon retirement - he opted for an Option which meant a lesser monthly check, but should he die I would continue to receive a monthly check. Upon retirement - the qdro forces him to continue with that option with me as the beneficiary. Needless to say if the retirement board is not informed they can't enforce it.

Also - should your X leave the job early for some reason - he'd get a lump sum of the funds he contributed - half that is yours.

Grace and Flowers posted 7/1/2013 09:27 AM

Tabitha, it makes no difference as to when HE can take money out.

Once you have the QDRO, your monies can be withdrawn by you, ASAP, with no penalty. Just the taxes...which you'd pay eventually anyways.

Again, the issue of when HE can get his portion is a non-issue. As I said. In my earlier post...get the QDRO, then you can do with your money what you please.

If you haven't discussed all this with your attorney, do it ASAP.

torn2bits posted 7/1/2013 19:58 PM

I just wanted to make a point about what SadMad said earlier.

I am not divorced. The QDRO order has been put thru. My WH and I signed the document agreeing to the withrawal from his plan. All funds transferred to me by court order my L put in.

The acct is mine and just got the check for the lump sum. My L is having an actuary figure the taxes for early withdrawal for me.

The court order stated our lawyers get paid first and the remainder is split between the 2 of us.

All this has happened even though we are not divorced and are not even in settlement discussions.

Court orders rule over the plan reqmnts of no early withdrawal.

Hope this helps.

rcantbleveit posted 7/1/2013 20:14 PM

We had 3 Qdros and each one cost $1500 for attorney fees. She only deals with Qdros so maybe that's why she was so high but she was highly recommended by many people.

rcantbleveit posted 7/1/2013 20:14 PM

We had 3 Qdros and each one cost $1500 for attorney fees. She only deals with Qdros so maybe that's why she was so high but she was highly recommended by many people.

tabitha95 posted 7/1/2013 21:27 PM

I talked to someone in hr at my work, which is the same state retirement (we both work for schools). It's not a plan that I will get a lump sum. When ex retires I will get a share of his payment and I will get a 1099.

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