PULL YOUR CREDIT REPORT Pull your credit report before the divorce so that anything in dispute can be resolved before the divorce is final. There are three major credit reporting agencies: Experian, TransUnion and Equifax. Be sure to get a copy of your report from each of them. You can view all the reports one time per year at no charge. A website to request your credit reports is www.annualcreditreport.com. The reports are the quickest and easiest way to get an overview of the outstanding loan balances, mortgages and credit card debt that you and your spouse will eventually divy…
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 Rolling over the funds into an IRA allows your ex to postpone the payment of taxes on the money until it is actually withdrawn from the IRA.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.