QDRO after death: What happens now?

Though divorcing parties might wish death upon each other, the aftermath is often horrendous. When a party dies, you discover a new world of complex and devastating outcomes. For the spouse of the dead participant to have a perfect interest in a qualified retirement benefit, a QDRO must be issued by the state district court with jurisdiction over domestic relations.

For this order to be valid, it has to meet all requirements of the plan, the state laws, and federal laws relating to the QDRO order. If you’re an alternate payee and, sadly, the participant dies, do you still have a stake? 

According to the Pension Protection Act of 2006 (PPA), QDRO is only regarded as a qualified domestic relations order if issued following the participant’s death or perhaps during an odd time.

QDRO after death has always been a complicated process, with the involved parties gnashing their teeth in frustration. What happens after the death of the participant? Do you miss out on your retirement benefits? The status of post-death QDROs has never been more apparent, and the Department of Labor’s PPA did little to address it.

If a participant should die while actively employed, a domestic relations order will not fail to be treated as a QDRO since it was issued after the participant’s death. However, the plan may fail if it provides a benefit otherwise not stated in the program. If the QDRO requires the provision of increased benefits, it will also fail to be a QDRO.

Getting your full pension after the death of a participant

The outcome largely depends on the provisions of the QDRO, and you must hire an experienced QDRO attorney for a better outcome. The QDRO may state that the alternate payees’ share can be payable to a designated beneficiary in the event of death. If, for instance, the alternate payee dies before executing a 401(k) plan, the alternate payee share is to be reverted to the participant. 

Under a defined pension plan, the issue becomes more complicated. Typically, QDRO attempts to provide benefits to beneficiaries and estate upon death. However, this is not permitted when under a defined benefit pension plan. Most of the time, the plan might provide for spousal survivorship benefits upon the plan participant’s death, not under any other survivors or participant’s estate.

If you’re currently on this bogus and complex process, the best bet is to hire an experienced QDRO attorney. With his experience, you will have a better chance of getting your benefits. Ready? Call 718-303-0753 or fill out the form.