Divorce in Minnesota: What is a Qualified Domestic Relations Order (QDRO)?

For many couples in Minnesota, retirement plans and retirement savings are among their most valuable financial assets. Yet, during divorce, these benefits are easy to overlook. Worse yet, divorcing couples sometimes divide retirement assets in a way that subjects them to avoidable early withdrawal fees and other tax penalties. 

Fortunately, there is a solution available. Do not leave money on the table. With a specialized type of court order called a qualified domestic relations order (QDRO), you can divide your retirement benefits in a cost effective and efficient manner. Here, our Mankato, MN divorce attorneys explain what you need to know about qualified domestic relations orders. 

Qualified Domestic Relations Orders: Understanding the Basics

As described by the Internal Revenue Service (IRS), a QDRO is simply a legal order that requires one person (the plan participant) to pay part of their tax-advantaged retirement benefits to another person (an alternative payee)—most often, the alternative payee is a former spouse. 

When set up properly, a QDRO can give a divorcee direct access to a share of their former partner’s 401(k) savings, IRA savings, or pension benefits. The QDRO officially recognizes joint marital ownership of those financial savings/benefits. 

Why Do I Need a QDRO?

You may be wondering: Can we simply divide up retirement benefits on our own? The answer is generally “no.” For a number of different reasons, splitting retirement holdings without the proper legal order could be a huge mistake. When divorcing couples fail to get a QDRO, they may run into problems, such as:

  • Struggling to divide retirement savings; 
  • Being hit with avoidable early surrender fees or tax penalties; and
  • Missing out on retirement benefits altogether, including survivor’s benefits.  

Under federal law, certain tax-advantaged retirement savings and benefits can only be divided between former spouses if a legally valid qualified domestic relations order is in place. A final decree order from a Minnesota state court is not enough—even if that court decree states that each spouse has joint rights to the retirement account. 

How a Minnesota Divorce Lawyer Can Help

If you and your spouse are working to divide retirement savings/benefits as part of your separation, an experienced Minnesota family attorney can help. You need a QDRO that is customized to meet your unique needs. In crafting a personalized QDRO, our divorce lawyers will carefully review the totality of your assets and how these savings and benefits fit into your overall settlement. We will make sure that the QDRO is properly drafted and that it is in your best interests. 

Call Our Mankato, MN Divorce Lawyers for Immediate Assistance

At Kohlmeyer Hagen, Law Office Chtd., our Minnesota divorce attorneys are committed to providing clients with effective, financially savvy legal guidance. If you have any questions about QDROs or dividing retirement assets, we can help. For a confidential initial consultation, please contact us at 507-625-5000. We handle family law matters throughout Southern Minnesota, including in Mankato, New Ulm, St. Peter, Owatonna, Blue Earth, and Rochester.