HOW TO DRAFT A QDRO (QUALIFIED DOMESTIC RELATIONS ORDER) - VIDEO #16 (2021)

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Tutorial video in a series of DIY divorce videos that explains how to draft a QDRO to slit a 401(k) or pension during a divorce.

A QDRO is a special type of court order that is essentially a set of instructions telling a retirement plan administrator how to divide a particular retirement asset such as a 401(k) or a pension.

One option is to hire an expert to draft the QDRO. The experts that are in the business of drafting QDROs are typically accountants or actuaries, although some are lawyers. You can Google “QDRO drafting” and find an expert to draft a QDRO for you. You can expect to pay somewhere in the neighborhood of $500 to $600 per QDRO.

Another approach is to draft your own QDRO using a model and instructions provided by the retirement plan administrator or custodian.

Not all retirement plan administrators provide model QDROs and instructions, but many of them do. Call the administrator for each of your retirement plans and ask if they can mail or email you a model QDRO and a set of instructions. When you receive the model, follow the instructions and prepare your own QDRO.

After your QDRO has been drafted, the next step is for you and your spouse to date and sign the QDRO. Some courts will require that your signatures on the QDRO be notarized.

Take your original QDRO and a copy to the court clerk, together with a self-addressed stamped envelope. The court clerk will give the QDRO to a judge to sign. After the judge signs the QDRO, the court clerk will mail you a filed-endorsed copy of the QDRO.

Many retirement plan administrators will accept a filed-endorsed copy of the QDRO. However, some plan administrators, particularly when you are dealing with retirement benefits through government entities, will insist on a certified copy of the QDRO.

After you get the certified copy of the QDRO back from the court, make a copy for yourself and a copy for your spouse. Then, take the certified copy and mail it to the plan administrator. When you mail the QDRO to the plan administrator, include a cover letter. Your cover letter will ask the administrator to review the QDRO and confirm that the QDRO is acceptable to the administrator. Your cover letter must also provide the plan administrator with your date of birth, your social security number, your spouse’s date of birth, and your spouse’s social security number. The address of the plan administrator is usually set forth in the QDRO.

The plan administrator will take some time to review the QDRO and let you know if the QDRO is acceptable. Some plan administrators will get back to you in a few weeks. Others will take a few months. Some government agencies can take a year or longer.

Some retirement plan administrators charge a fee to review a QDRO. Many administrators do not charge any fee to review a QDRO. If a review fee is going to be charged, the administrator will take the fee out of the retirement account.

Some administrators charge hefty review fees. You can pay more for a review fee than the amount you paid to have a professional draft the QDRO. Some administrators won’t charge a review fee or will charge a reduced review fee if you use their model QDRO. Fidelity tends to charge very hefty review fees if they have a model QDRO on their website and you don’t use it, but instead hire a professional to draft a QDRO that differs from the Fidelity model.