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 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.