When a couple divorces, one of the assets often divided and awarded by the court is a portion of the parties’ retirement plans. A Qualified Domestic Relations Order, commonly called a QDRO, is an order signed by the court that deals with pension funds. The QDRO establishes your soon to be ex’s legal entitlement to receive a designated amount of a qualified plan account or benefits.

The party who is awarded a portion of retirement benefits will subsequently be responsible for paying related income taxes and fees associated with withdrawing the benefits.

A QDRO allows your ex-spouse to withdraw their share of the money or roll it over into another IRA as outlined by the terms in the QDRO. Rolling over the funds into an IRA allows your ex to postpone the payment of taxes on the money until it is actually withdrawn from the IRA. This aspect is important because it makes the party awarded the funds responsible for the taxes rather than the beneficiary of the retirement plan.

As QDROS can be very intricately drafted and have important tax repercussions, it is very important to have a family law attorney who understands the complexities of QDROs and does not just rely on an employer’s sample plans.

A prenuptial agreement is a contract made between two parties who intend to be wed. This agreement outlines many provisions, usually related to finances and property, which the parties want to agree to prior to being married. Such agreements may include:

  • The rights to property owned prior to being married;
  • The right to spousal maintenance or the elimination of spousal maintenance should the marriage end;
  • The characterization of property acquired during the marriage.

Prenuptial agreements can be useful for parties with significant assets. A prenuptial agreement must be signed by both parties as well as notarized by a notary prior to being filed in the couple’s county of residence. A prenuptial agreement may be amended or terminated by the parties after the marriage.

A prenuptial agreement may be invalidated for one of the following reasons:

  • The agreement was not signed voluntarily;
  • The agreement was unconscionable when signed;
  • Prior to signing the agreement the party was not provided a fair and reasonable disclosure of the property or financial obligations of the other party; did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party; and did not have or could not have had adequate knowledge of the property or financial obligations of the other party.

The parties may also agree to revoke the premarital agreement. This must be done by drafting a formal written revocation signed by both parties.

Premarital agreements can be difficult to draft and the intricacy of the drafting makes it very important that you retain a competent family law attorney that can assist you in drafting an enforceable premarital agreement.

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