Qualified Domestic Relations Order

During divorce, retirement funds, such as those in IRAs, 401(k) plans, and Keoghs, may need to be divided. Early withdrawals from these accounts may incur penalties unless a Qualified Domestic Relations Order (QDRO) is obtained.

The QDRO directs a retirement fund's administrator to pay a specific amount to a former spouse or child. The former spouse may defer tax on the payments by rolling them into an IRA within 60 days of receipt. Payments made to a child are taxed to the plan participant.