QDRO - Both Parties are Participants

[Christine Roberts]

Seeking comments/insights from those who have drafted QDROs in this situation - esp. in the family owned business setting where the wife must separate from service in order to roll her own account out of the plan.

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[Christine Roberts]

We are doing one QDRO so that W can get a portion of H's profit sharing plan account - the bigger concern is documenting wife's separation from service from H's company so that she can move her assets from the plan.

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[Guest [Pat M]]

Are you looking for a way to avoid having to do a QDRO for each participant? Plans often cover both spouses, in particular where there is a large employer in a small town. Usually we see one QDRO for each participant, unless an offsetting division of assets has been incorporated into the divorce agreement. The fact that one or both parties continue in employment does not impact the validity of a QDRO.

For example, H may have a DB pension, (k), and PSP. W may have only (k). Depending on their agreement, W may give H part of k) to get specific $ or % of pension. [Two QDROs]

[This message has been edited by [Pat M] (edited 04-19-2000).]

[Guest Bob Collins]

When the alternate payee's account is NOT combined with her account as a participant, the distribution rules are those for alternate payees. In this case the wife's ability to take a distribution or rollover her alternate payee account should not be subject to her separation from service. You need to determine when an alternate payee can take a distribution under the terms of the plan document and the QDRO court order. Be careful, many plans tie an alternate payee's right to a distribution to the participant's (her spouse) attainment of age 50 or separation from service. If he is under age 50 and still working, it is possible that even if she terminates employment she may not be able to pull the alternate payee money out of the plan.