When going through a divorce in Texas, dividing retirement accounts often requires more than just a line in your final decree. For certain types of retirement plans—like 401(k)s and pensions—you’ll likely need a Qualified Domestic Relations Order (QDRO) to divide those assets legally and without penalties.
At Haugen Law Firm, P.C. we help clients across Denton County, Collin County, Cooke County, Dallas County, and Tarrant County navigate the complexities of QDROs to ensure their retirement benefits are properly protected and divided during divorce.
What Is a QDRO?
A Qualified Domestic Relations Order (QDRO) is a specialized legal order that directs a retirement plan administrator to divide retirement benefits between spouses as part of a divorce. It gives legal authority for the plan to pay a portion of one spouse’s retirement account to the other without early withdrawal penalties or tax consequences.
When Is a QDRO Required?
You’ll need a QDRO if you're dividing any qualified retirement plan governed by ERISA (Employee Retirement Income Security Act), such as:
- 401(k)s
- 403(b)s
- Traditional pensions (defined benefit plans)
- Profit-sharing plans
- Government or military pensions (with specific rules)
IRAs and Roth IRAs do not require a QDRO, but they must still be divided carefully to avoid tax issues.
Why Is a QDRO Important?
- Without a QDRO:
- You can’t legally access or transfer funds from a qualified retirement plan.
- The account holder may face penalties and taxes.
- The non-employee spouse might not receive their fair share.
- The retirement plan administrator may refuse to divide the account.
In short: the divorce decree alone is not enough to divide a qualified plan. The QDRO is the legal mechanism that makes it enforceable.
What Does a QDRO Include?
A QDRO must contain specific information, including:
- The name and last known address of both spouses
- The name of the retirement plan
- The percentage or exact amount to be paid to the non-employee spouse (also called the “alternate payee”)
- The method of payment
- The timing of distribution (immediate or deferred)
Each retirement plan has its own rules and procedures for reviewing and approving a QDRO, so it’s important to draft it precisely.
When Should a QDRO Be Filed?
Ideally, a QDRO should be:
Drafted and submitted for pre-approval by the plan administrator before the divorce is finalized
Signed by the judge and incorporated into the final divorce decree
Submitted promptly after the divorce to avoid delays in benefit payments
Waiting too long to file can lead to lost benefits—especially if the account holder retires or dies before the QDRO is in place.
Who Prepares the QDRO?
While some divorce attorneys prepare QDROs in-house, others work with financial or legal professionals who specialize in them. At Haugen Law Firm, P.C. we ensure your QDRO is correctly drafted, reviewed, and filed to avoid costly mistakes or delays.
Protecting Your Retirement Rights
If you're the alternate payee (non-employee spouse), you have the right to receive your share of retirement benefits. A properly executed QDRO can help you:
- Roll over funds into your own retirement account
- Begin receiving benefits at the appropriate age
- Secure long-term financial stability post-divorce
Common Mistakes to Avoid
Assuming the divorce decree alone divides retirement benefits
Waiting too long to file the QDRO
Not checking with the plan administrator before drafting
Using a generic or one-size-fits-all QDRO template
Failing to confirm tax implications
Need Help With a QDRO in Texas?
At Haugen Law Firm, P.C. we understand the critical role a QDRO plays in divorce. We’ll help you draft, review, and submit your QDRO accurately and efficiently—so you can move forward with financial peace of mind. We’re proud to serve families and individuals across Denton, Collin, Cooke, Dallas, and Tarrant Counties with trusted legal guidance in family law, criminal defense, and estate planning. If you have questions about your legal rights or need personalized support, our dedicated team is here to help. Contact us today!