Property Division in Wisconsin: Overcoming the Presumption of Equal Division for Marital and Pre-Marital Property

If your divorce involves retirement accounts such as a 401(k), 403(b) or pension plan, you may need a document called a qualified domestic relations order (QDRO) to divide those accounts. Retirement accounts often represent a significant part of a divorcing couple’s assets, so it’s important to understand what is involved in order to receive your share of those accounts after they have been divided by agreement or by the court.

What Does a QDRO Do?

Retirement plan providers are contractually bound to pay benefits to, or hold account assets for the benefit of, the account holder or plan participant. A QDRO is a legal directive requiring the plan provider to instead distribute a portion (or all) of the account holder’s benefits or account assets to his or her former spouse as part of the division of the marital estate in a divorce.

QDROs should be tailored to the specific types of account(s) involved. Public employee benefit accounts may require different provisions than private employer 401(k) plans, and there are often additional considerations for government or military retirement accounts.

When QDROs are well-drafted, they include protections for the recipient spouse to ensure he or she receives the amount that the parties agreed upon (or the amount that the court ordered he or she receive) from the other spouse’s retirement account. When finalized, the QDRO will have to be signed by the judge presiding over your divorce case.

When Should QDROs be Drafted?

Although your divorce order may have awarded you a share of your former spouse’s retirement accounts, you will need a Wisconsin QDRO in order to receive those assets.

QDROs can be drafted as soon as the divorce has been finalized. While you may assume there is no rush to get a QDRO in place if your ex-spouse isn’t actually eligible for benefits yet, it makes sense to begin the process immediately.

Waiting too long to begin the QDRO process could have adverse consequences. Under Wisconsin law, when the parties fail to take action on a judgement in a divorce and more than 20 years have passed, that judgment may no longer be enforceable. For an individual who thought it was best to wait to get a QDRO until his or her ex-spouse became eligible for benefits, this could be an unpleasant surprise. Properly preparing and filing a QDRO can also ensure you will actually collect under your spouse’s retirement plan.