Qualified Domestic Relations Order - QDRO

AAA

DEFINITION of 'Qualified Domestic Relations Order - QDRO '

A type of court order typically found in a divorce agreement that recognizes that the ex-spouse is entitled to receive a predefined portion of the individual's retirement plan. In most cases, the qualified domestic relations order (QDRO) allots 50% of the value of the assets gained from the beginning of the marriage to the time of the divorce to the ex-spouse.

INVESTOPEDIA EXPLAINS 'Qualified Domestic Relations Order - QDRO '

When the distribution goes the ex-spouse, the ex-spouse becomes responsible for any taxes incurred when the money is distributed. However, if the individual does not receive a QDRO and decides to distribute the retirement-plan assets to his or her ex-spouse, the individual will still be responsible for the taxes on the ex-spouse's portion of the money, even though he or she no longer possesses it.

RELATED TERMS
  1. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  2. Income Tax

    A tax that governments impose on financial income generated by ...
  3. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  4. Taxable Gain

    A profit on the sale of an asset that is subject to taxation. ...
  5. Prenuptial Agreement

    A type of contract created by two people before entering into ...
  6. Slander

    Slander is the act of harming one person’s reputation by telling ...
RELATED FAQS
  1. How do alimony and child support factor into my taxable income?

    The Internal Revenue Service, or IRS, applies a different tax treatment to alimony than child support. Most forms of alimony ... Read Full Answer >>
  2. How can I protect my business from my spouse during a high net worth divorce?

    For high net worth individuals (HNWIs), deciding to end a marriage through divorce brings special circumstances to consider. ... Read Full Answer >>
  3. When is litigation better than mediation in a high net worth divorce case?

    Typically, litigation is better than mediation in high-net-worth divorce cases for two major situations – when there are ... Read Full Answer >>
  4. Why are high net worth divorces considered more challenging than other divorce cases?

    All divorces are emotionally difficult and create a financial strain on the parties involved. As it pertains to dividing ... Read Full Answer >>
  5. How do Social Security benefits for widows or widowers work?

    If you are the surviving widow or widower of a deceased worker who would have been eligible to receive Social Security benefits ... Read Full Answer >>
  6. How do I find a good personal bankruptcy lawyer?

    While it is not necessary to hire an attorney to file bankruptcy, the rules that govern bankruptcy can be extremely complex, ... Read Full Answer >>
Related Articles
  1. Retirement

    Divorcing? The Right Way to Split Retirement Plans

    Mishandling how you define and allocate retirement-plan assets in a divorce can cost you plenty in taxes and aggravation. Here's how to do it right.
  2. Retirement

    Marriage, Divorce And The Dotted Line

    Does signing a prenuptial agreement put your marriage on shaky ground, or is it just smart planning?
  3. Budgeting

    Get Through Divorce With Your Finances Intact

    Find out how to split your finances without coming up short.
  4. Investing

    Can You Be Sued for Negative Comments Online?

    It's important to understand the basics of libel law so you can avoid posting statements that might result in a lawsuit.
  5. Investing Basics

    Is Your Broker Churning Your Account?

    Is your broker churning your account to generate fees? Here's how to know and what recourse you have.
  6. Investing

    Why We Need Antitrust Laws

    A look at antitrust laws in the United States and the many anticompetitive practices they safeguard against.
  7. Investing

    How to Protect Your Retirement After a Divorce

    Divorce is never fun, but knowing the rules and anticipating the impact of retirement plan division and pension payouts can make things easier.
  8. Trading Strategies

    IPO Flippers And The Companies Who Hate Them

    Learn how flipping activity affects an initial public offering.
  9. Taxes

    Gay Weddings Mean Big Business

    The coming boom in same sex marriages represents a money-making opportunity for anyone in the wedding industry.
  10. Professionals

    Top Benefits of Prenup and Postnup Agreements

    It can be a sticky subject, but prenuptial or postnuptial agreements can head off a lot of potential messiness. Here's a quick guide.

You May Also Like

Hot Definitions
  1. Dog And Pony Show

    A colloquial term that generally refers to a presentation or seminar to market new products or services to potential buyers.
  2. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  3. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  4. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  5. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  6. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!