The Ins and Outs of a Qualified Domestic Relations Order QDRO

Sydney Mitchell:

Hi. My name is Sydney Mitchell.

Matthew Brickman:

Hi, I’m Matthew Brickman, Florida Supreme court mediator. Welcome to the Mediate This! Podcast where we discuss everything mediation and conflict resolution.

(00:14):
Had a great question from a listener, uh, but not a whole lot for everybody to know here, but I had a great question from a listener that said, what are the aspects of a quadro that I need to know? And they have a second part to the question that says, is this always court ordered? Or can one spouse initiate it? So for those of you that may not know what a quadro is, a quadro, it’s A-Q-D-R-O, we call it quadro for short. What it, uh, stands for is a qualified domestic relations order. This is how we divide up retirement accounts in a divorce. So say for example, there is a 401k, or let’s say that you have a pension or a 4 0 3 B or a, um, retirement account of, of some sort that simply can’t be transferred, um, without tax implications and penalties. Well, then how that is done is through a quadro or a qualified domestic relations order.

(01:15):
So what are the aspects? What do you need to know? Well, it goes back to equitable distribution. The quadro is done for the marital portion of the account. So how do you figure out the marital portion? It is the amount from the date that you signed your marriage certificate and to the date that somebody filed for divorce. That’s the quadrant that the Quadro expert, um, who is an actuary. They’re basically a, a, uh, attorney accountant, but they are going to look at the account and they’re going to go date of marriage to data filing. That is how we figure out that amount. And then what they do is they go in and then divide up the account based on data marriage to data filing. So the marital portion. And then what happens is then the receiver, say for example, this is the husband’s 401k. So then the wife will open up her own retirement account, whatever account she wants to open up, she’ll open up.

(02:19):
And then what happens is her 50% of the marital portion of that retirement account will get transferred from his account to her account without the husband having to pull money out of the account and pay taxes and also pay a penalty to give the wife then her 50% share. Um, so is this always court ordered? Uh, yes. It has to be done after the divorce is officially, uh, certified. After the disillusion is done, the entry of the final order has been made because it can’t have tax implications, so you have to get officially divorced before the quadro can be done. So sometimes what happens is people will get all the paperwork done, so they may come to mediation. We’ll, you know, do the language for the marital portion, giving direction to the actuary. We may even recommend that they, uh, contact a couple different actuaries and price out, you know, the cost, and then give the actuary all of the documents ahead of time.

(03:23):
So the actuary can go ahead, go in, look at the account, do the analysis, and get all the paperwork done, but they can’t divide the monies until they get the entry of final judgment from the court. Once they get that, then they can basically hit that button to then initiate the transaction. So some people will do this before, uh, disillusion, that way it’s, it’s much faster. But a lot of people, most people I think, wait until the entry of final judgment is entered. Then they reach out, they get an actuary, get them the documents, the actuary then goes in, does the analysis, and eventually does the transfer. Um, so can one spouse initiate it? Well, it is one spouse that is initiating it. Um, so for example, if it’s the husband’s 401k, the wife is not the one who’s actually initiating it with the Quadro expert because she doesn’t have the documents to provide to the Quadro expert because it’s the husband’s 401k.

(04:21):
But we usually take care of all of that, uh, language in the mediation agreement. For example, the other day I did a mediation, uh, where we were dividing up the husband’s, uh, 401k and also a pension. And so we built out all the parameters that said, within five business days of the entry of final judgment for disillusion of marriage, the husband will provide, uh, all of the documents to the actuary. And, um, and so, um, you know, we build out, you know, who’s providing the document. Sometimes we’ll even put in timelines that says, okay, within three days of the entry of final judgment, the husband will engage the services of the actuary, and then within five days of receiving any requests from the actuary, he’ll provide all documentation. Um, and so, you know, that’s how the initiation process is done. Um, again, usually what I do as a mediator is I’ve got, uh, I don’t know, maybe eight or 10 different Quadro experts, um, depending on the type, depending on, um, where the people may live that I just like giving out the names to them.

(05:39):
I, I tell, uh, people call all of them, price it out because, you know, it can have a varying cost. I’ve seen Quadras range anywhere between $450 and $1,100 each. Uh, that’s quite a spread. So I always encourage everybody call, price it out, um, see, see what that’s gonna be. And so that is, um, basically what you need to know, I guess as, as, uh, a listener of, you know, what are the aspects of the quadro? What do you need to know? You don’t need to really know that much. I don’t even need to really know that much. Um, I just need to know, okay, what is your date of marriage? What is your date of filing, what kind of an account it is? And then I’ll refer you out then to a Quadro expert who will then take care of that for you. So, uh, hopefully that answers your question. Uh, whoever wrote this in and I look forward to answering more questions in the future.

Matthew Brickman:
Occasionally Sydney and I will be releasing Q&A bonus episodes where we’ll answer your questions and give you a personal shoutout.

Sydney Mitchell:
If you have a comment or question regarding anything that we discuss, email us at info@ichatmediation.com that’s info@ichatmediation.com and stay tuned to hear your shout out and have your question answered here on the show.

Matthew Brickman:

For more information about my services or to schedule your mediation with me, either in person or using my iChatMediation Virtual Platform built by Cisco Communications. Visit me online at www.iMediateInc.com. Call me at 561-262-9121, Toll-Free at 877-822-1479 or email me at MBrickman@iChatMediation.com.