What You Need to Know About a QDRO for Divorce in California
A Qualified Domestic Relations Order (QDRO) is a court order that details how a private retirement plan/pension will be divided between spouses in a divorce. Here’s everything you need to know about a QDRO for divorce in California.
In California, any property acquired during a marriage is subject to equal division amongst two spouses in a divorce. This includes a retirement plan/pension. However, the courts have the discretion to divide certain property in any impartial manner they see fit, as long as the entire division of property is equal between the two spouses.
What is a Qualified Domestic Relations Order (QDRO)?
A QDRO is a court order that is specially prepared in cases of divorce in order to divide up a retirement plan or pension. QDROs are used for private retirement plans or pensions. A Domestic Relations Order, or DRO, is used for state and federal public retirement plans or pensions. The purpose of a QDRO is to inform the organization or company that is responsible for paying out the retirement plan or pension how much money to give to each spouse.
Related: How to Calculate Pension Value in a California Divorce
The Two Main Types of Property in California
Community Property
California is a community property state. Community property is everything that spouses own together. It includes everything bought or acquired during a marriage (excluding gifts or inheritances). It also includes all earnings accumulated that either spouse earned during the marriage, and everything bought with the earnings.
Related: Community Property Laws in California
Separate Property
Separate property is anything bought or owned before one was married. Earnings and other money made from the separate property during a marriage is also considered separate property. Gifts and inheritances to an individual spouse are considered separate property in California.
How Retirement Plan/Pensions are Divided in a California Divorce
In a California divorce, community property is required to be divided equally—this includes retirement plans and pensions. However, the courts have the authority to divide property as best as they determine, as long as the total value of the property divided is equally divided amongst the spouses.
The method in which retirement plans and/or pensions are divided in a California divorce vary by circumstance. If a retirement plan or pension is considered community property, the courts may divide it amongst the spouses in a few ways:
- The courts may award the entire community property interest in the pension to the employed spouse who earned the pension and award the other spouse other property considered to be of equal value. The is commonly referred to as division by cash-out, in which the spouse who did not earn the pension in question from a job, is instead given money or equally valued property from other assets.
- The courts may divide the retirement plan or pension by division in kind. This simply means that the retirement plan/pension benefits are to be divided equally among the spouses.
- Finally, the court may reserve jurisdiction to watch over future payments to each spouse. This is referred to as Reservation of Jurisdiction, which typically occurs when the courts believe that pensions will change over time and find that it is appropriate to settle the order and decide to divide the benefits at a later time.
Related: How to Keep Your Pension in a California Divorce
Joinder
A joinder is when one adds another party (besides the petitioner and respondent) to the case. In some cases, the organization or company that manages the retirement plan/pension must be added as a party to the divorce before a QDRO can be made about the case. Use the form “Retirement Plan Joinder—Information Sheet” FL-318 to determine if a joinder is required. A joinder must be completed before the QDRO is completed.
How to Get a QDRO for a Retirement Plan/Pension
1. List the retirement plan/pension plan as either community property or separate property on the QDRO petition or response.
2. Join the organization or company that manages the retirement plan/pension to the case (if it is required for the type of plan in question).
3. Once the QDRO is prepared, have it signed by the Judicial Officer of the case, and served to the organization or company that manages the retirement plan/pension.
Contact Us
If you have any more questions on what a QDRO is in a California divorce, contact us. Get your free consultation with one of our California Property Division Attorneys today!