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Another important divorce tool to know is QDRO

Louisiana is a community property state. What that means if you are a divorcing couple is that assets accumulated in the course of the marriage are equally owned. For example, assuming you bought a house together, you each are entitled to half the value of that property. The same goes for cars, furniture and artworks or collectibles.

Deserving of inclusion in marital assets, but sometimes overlooked, are retirement funds. Such moneys accumulated during the marriage are subject to division on the basis of a 50-50 split. However, considering that the funds might be legally held in one spouse's name, distribution in divorce often requires special legal documentation, called the Qualified Domestic Relations Order (QDRO).

Not just another form

Whether stated as individual letters or pronounced KWAH-droh, this tool is an order signed by the court that directs money managers of retirement accounts about how to distribute the funds between the ex-spouses. But potential beneficiaries of a QDRO areĀ not limited just to ex-spouses. Funds might be used for child support, for example.

Several key things to know about QDROs include:

  • One is needed not only for a 401(k), but for any pension or other employer-sponsored plan that might exist.
  • Individual Retirement Accounts (IRAs) don't need a QDRO, but do require what's called a "transfer incident to divorce" form.
  • While community law calls for a 50-50 split, a valid prenuptial agreement could supersede that.
  • The number of options for QDRO distributions carry different tax implications, so careful planning is recommended.

Considering all that is at stake, it becomes clear why working with an experienced lawyer is always recommended.

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