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. Income Tax

    A tax that governments impose on financial income generated by ...
  2. Taxable Gain

    A profit on the sale of an asset that is subject to taxation. ...
  3. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  4. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  5. Prenuptial Agreement

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

    An intellectual property right that protects a new and unique ...
Related Articles
  1. Divorcing? The Right Way to Split Retirement ...
    Retirement

    Divorcing? The Right Way to Split Retirement ...

  2. Marriage, Divorce And The Dotted Line
    Retirement

    Marriage, Divorce And The Dotted Line

  3. Get Through Divorce With Your Finances ...
    Budgeting

    Get Through Divorce With Your Finances ...

  4. When Taking Vows, Vow To Spend Less
    Personal Finance

    When Taking Vows, Vow To Spend Less

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center