When it comes to paying child support or alimony, some former spouses can become uncooperative. What many custodians don’t know is that a Qualified Domestic Relation Order can be used to collect such support payments.

However, a QDRO distribution paid to the custodian or other independent of the plan participant is taxable. Some plans even make the check payable for the benefit of the child.

Obtaining a lump sum

If the plan participant has not been current on child or spousal support, a QDRO can be prepared by an expert requesting a lump sum to be paid to the alternate payee. Note that child support is not taxable, but maintenance is often tax-deductible to the plan participant and alternate payee.

The process

To collect support payments especially from a retirement plan, you need to provide the name of the financial institution where the account is being held. You also need to know the current value of the plan, which is often disclosed during a divorce. However, there is a possibility that the location of the plan has been changed due to a change of job by the plan participant.

To be certain of the plan location, you may be required to file a request for discovery or request the exchange of financial information. You don’t need to worry since the location of the plan is not an issue. Even if it’s in another state, the QDRO can easily be forwarded to the plan participant in the other state.

Working with a QDRO attorney

The QDRO process might seem complicated and cumbersome. But doesn’t have to be when working with an experienced QDRO attorney. Not only will this save you from mistakes that will delay your order, but it will also save you a lot of headaches in the long run.

First, your attorney will make a draft and send it to your former spouse to be signed. After which it will be taken to court to be signed by the judge and finally to the plan administrator. As long as you follow the due process and there are no mistakes, the plan administrator will approve your order without hesitation.

Take note that there is no limit on the number of child support orders that can be submitted. Child support arrears can be paid by Social Security, Military pension, Louisiana retirement systems, and from Federal Retirement System.

Take a step now

We have been helping our clients scale through this process successfully, and we can help you too. Feel free to get in touch with us by calling or fill our contact form to book an appointment. We will fight to protect your best interest no matter the circumstances surrounding your case.