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    If you have a retirement benefits plan and you are responsible for paying spousal or child support, the court may issue a decree called a qualified domestic relations order. These decrees, also called QDROs, allow the recipient of the support payments to receive funds from that retirement benefits account. In other words, it recognizes that the recipient of the support payments has a spousal ownership interest in the retirement plan and allows a portion of the retirement plan’s benefit to be paid to them.

    Qualified domestic relations orders require specific information and comply with rules set out by the United States tax code, as well as all appropriate rules in place with the Internal Revenue Service. They should include the most recent address information for all parties involved, as well as the amount of the benefits to be allocated toward the recipient of the support. Social Security Numbers and the retirement plan’s identification number are also required.

    When the recipient of the benefits is a child, the person paying the benefits is responsible for handling taxes on the plan. If the recipient is an adult, they take on co­owner responsibilities and must share the liability for taxes. QDRO benefits must be part of what the retirement plan covers. A qualified domestic relations order cannot demand benefits that do not fall within the original plan.

    Under many retirement plans, back child support payments can be paid immediately under a QDRO, even if you aren’t yet eligible for a distribution. If you live in the Ft. Lauderdale area and you have questions about a qualified domestic relations order or how one could impact your retirement plan, please contact us at Kenny Leigh and Associates for more information!