If you and your spouse face a divorce, you need to pay particular attention to your respective pension or retirement plans when constructing your marital property division agreement. 

As SmartAsset.com explains, if any of them are covered by the Employee Retirement Income Security Act of 1974, they have specific distribution rules by which you must adhere. In addition, you likely will need more than a simple property settlement agreement. You will also need a signed Qualified Domestic Relations Order that the judge will also need to sign and incorporate into your ultimate divorce decree. 

Constructing a QDRO 

If you determine that ERISA covers any of your or your spouse’s pension or retirement plans, you should immediately contact each plan’s administrator. Ask them if they have a sample QDRO applicable to their specific pension/retirement plan that they can send you by email attachment or snail mail so you and your attorney can use it as a guideline when writing your own QDRO. 

You and your attorney must strictly adhere to the provisions and specific language of each sample QDRO. If you fail to do so, you could be in for some major nasty surprises when it comes time to distribute the money. Your wisest strategy is to send your completed QDRO to each plan administrator prior to signing it so that (s)he can review it and make certain that you have crossed all the necessary T’s and dotted all the necessary I’s. 

Once you receive this approval, you and your spouse should then sign your QDRO before submitting it to your divorce judge. (S)he, in turn, will need to approve it and issue it as a court order, whether separately or by incorporating it by reference into your divorce decree.