Smith & Downey uses its considerable retirement plan expertise to assist in the “qualified domestic relations order” drafting process from start to finish.
A “qualified domestic relations order” (QDRO) is a legal order prepared in connection with a divorce that outlines how a participant’s retirement plan benefits will be divided among the parties following the divorce. The QDRO directs a pension or other retirement plan to split the future retirement plan benefits of one spouse (the participant) among the participant and the alternate payee (usually, the other spouse). Because of certain restrictions that impact retirement plans, only a QDRO can serve this function. That is, a divorce decree or other document purporting to divide the parties’ assets generally will not, in and of itself, satisfy the requirements necessary to be considered a QDRO by a retirement plan.
It is human nature to attach less importance to a future right (e.g., future pension entitlements) than a current right (e.g., the division of a residence). Consequently, the QDRO usually gets less attention in the divorce process than it deserves even though future pension entitlements are often one of the most valuable property matters at issue in a domestic relations situation.
As employer advocates and retirement plan compliance experts, Smith & Downey attorneys are called upon daily to review these QDROs on behalf of our employer/plan sponsor clients. This ensures that the QDRO is unambiguous and does not threaten the plan’s tax-qualified status.
The preparation of QDROs by non-lawyer service providers are almost always substandard from a quality perspective: either the QDROs do not comply with federal laws, they do not truly capture the goals of the parties, or both. This is a product of the commoditization of this important legal instrument as an add-on service of non-lawyer service providers that process the orders with no legal expertise and with no regard for advocacy.
In several markets throughout the United States, the firm regularly supports domestic relations lawyers to draft and review settlement agreement language and QDROs on behalf of their clients.
The firm's implementation of efficient processes allows the firm to remain competitively priced with the “QDRO mills.” Further, Smith & Downey has the significant advantage of being a law firm (and accountable for quality as such) and being properly positioned to assist with the implementation of advantageous strategies for the lawyer’s client that non-experts simply cannot see.
Our primary experts in QDRO consultation include Katherine Gruner, based in Garden City, New York, and Jennifer Smith, based in Bend, Oregon.
Smith & Downey's qualified domestic relations order preparation/review practice is an element of the firm's nationwide work in employee benefits and executive compensation law. For additional information, contact Smith & Downey.