Some people automatically jump to the conclusion they need a QDRO (Qualified Domestic Relations Order) when a retirement plan exists in a marital estate. Yet, is a QDRO needed for every retirement plan in a divorce? How do you make the decision whether to move forward and obtain a QDRO for your retirement plan(s)?

Ultimately, the marital estate is divided based on a negotiated agreement between the two parties. Yet, there are usually lots of details within a retirement plan that need to be reviewed to uncover the risks that may hide in the language. The decision to split a retirement plan 50/50 may speak to the expectation of asset allocation or future distributions. Yet, there is more to the decision than just splitting the assets in half and the details can make a difference. These details determine whether or not you need a QDRO for your divorce.

By way of background, the primary purpose of a QDRO is to allow one or both spouses to become a participant of the other spouse’s retirement plan. In order to become a participant the administrator of the plan needs to approve the QDRO which is a separate process unto itself and beyond the scope of this article.

Here are some questions to think about to determine whether you need a QDRO for your divorce.

  • Is the size of the assets in each retirement plan worthy of creating a QDRO? There is an expense to create a QDRO. There may be another option to divide up the assets in the marital estate.
  • What is the cost basis of each retirement plan?
  • What are the tax implications of future distributions to each participant?
  • How might the retirement plan be divided?
  • Are the retirement plans invested in the same investments? If not, what is the difference in exposure?
  • How stable are the investments of each retirement plan?
  • Are there certain restrictions within the each plan that could constrain future distributions?
  • Is there a risk that one retirement plan is not fully funded from the corporation? What happens under these conditions?

Evaluating whether you need a QDRO requires a financial expert — skilled in the art of divorce — to review the rules and constraints of the retirement plan. Through the review the financial expert will inform you whether you need a QDRO, specifically identifying whether any potential risks or opportunities need to be addressed.

About the Author

Larry Smith is a Founding Partner of Divorce Outcomes, a specialized professional services firm that manages all of the financial aspects in a divorce process. Since 2003 he has worked as a trusted financial advisor, financial advocate, divorce architect and technical financial expert; he is not an attorney. He is an alumni of KPMG and Andersen with expertise in technical accounting, forensics, sophisticated taxation, management consulting, risk management, advanced process engineering, business combinations, divorce management, multi-party negotiations, advanced quality analytics and cognitive performance technologies. Since 1986 Larry has been advising individuals and organizations about innovative financial solutions to resolve complex financial challenges that arise in life and in business.

For both personal and business divorces, Larry is considered an expert in divorce strategies, divorce process management, financial divorce architecture, financial risk management, taxation for divorces, financial divorce forensics, advanced divorce analytics, financial divorce negotiations and mediation, business valuations and sophisticated equity structures. He helps clients shape complex financial decisions, manage communication risks and ever-changing negotiating positions to strategically preserve or grow wealth from these types of transactions.

If You Have a Question

If you have a question, feel free to contact me at [email protected] or 617-680-5222. The call is free. I will spend 30–60 minutes with you. I will provide you an honest assessment as to where I think you are positioned in your divorce process or answer any questions you have. I may provide you some guidance, insight or advice that you can take with you as you wish. There is no obligation to move forward. The phone call is designed to ease your fears, provide you some options to pursue and a potential road to run on that can lead you down a path to achieve a successful outcome.

About Divorce Outcomes

Divorce Outcomes is a specialty services firm that helps people both domestically and internationally manage all of the financial decisions that arise in their divorce process. We are not attorneys. We are financial experts who partner with our clients as their personal financial advocates. We help our clients manage their divorce process, uncover hidden financial risks, architect divorce solutions, manage ever-changing negotiating positions, communicate complex financial matters and close the divorce process as soon as possible with a goal to arrive at the best outcomes possible. Throughout the process we evaluate the current state of our clients’ financial lives with an objective to best reposition their future. We do not sell any products. We simply raise issues that are in our clients best interest. Our clients share with us we:

  • unfold, analyze and repackage their financial life so they are well positioned after their divorce
  • preserve the value of their business or marital estate
  • continuously strive to provide a return on our services
  • build balanced financial solutions grounded in evidence
  • find ways to make our client, and at times both parties, money through the process
  • design their divorce to work for them and their family’s life
  • provide mental clarity to make decisions
  • reduce the total process time from start to close
  • minimize the stress and unpleasant memories that can last a lifetime

As we reach an agreed upon settlement structure, we help our clients identify a fitting attorney who can leverage the financial solution to draft and record the requisite legal documents. Where outcomes are at risk from a traditional process, we function as expert financial negotiators or financial mediators to turn around the situation and achieve our client’s desired outcomes.

Learn more about us at or review our blogs to gain a clearer understanding about our approach and how we maximize the financial outcomes for our clients.


This communication is for general informational purposes only which may or may not reflect the most current developments. It is not intended to constitute formal advice or a recommended course of action as every person’s situation is unique and different. The information here is not intended to be, and should not be, relied upon by the recipient to make a decision without professional guidance.

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