When it comes to divorce and spousal support, there are a lot of things that need to be considered. One important issue is how to properly divide up retirement accounts and other assets. If you’re wondering about qualified domestic relations orders (QDROs) in Arizona, here are five quick tips to help you out. Keep in mind that these are general tips and that each situation is unique – so you’ll want to speak with an attorney if you have specific questions.
Tip#1 Understand the Different Types of QDROs
When it comes to dividing up retirement accounts in a divorce, two different types of QDROs can be used. The first is known as a Full QDRO, which covers all aspects of the divorce agreement. This type of QDRO is typically used when both spouses agree on how the assets should be divided. The second type of QDRO is known as a Partial QDRO, which only deals with specific issues related to retirement accounts. This type of QDRO is typically used when there is some disagreement about how the assets should be divided. Either way, it is important to understand the difference between these two types of QDROs before proceeding with a divorce.
Tip#2 Know What is Covered Under a QDRO
A QDRO can cover a variety of different assets, but the most common asset that is covered is a retirement account. This includes both 401(k)s and IRAs. In some cases, other assets such as life insurance policies and health savings accounts can also be covered under a QDRO. However, it is important to note that not all assets can be divided through a QDRO. For example, pensions can typically only be divided through a pension plan’s own rules and regulations.
Tip#3 Determine Who Will Prepare the QDRO
In most cases, the party who is responsible for dividing the assets in a divorce will also be responsible for preparing the QDRO. However, there are some cases where this is not possible. For example, if there is some disagreement about how the assets should be divided, it may be necessary to hire a third party to prepare the QDRO. In addition, if one party cannot prepare the QDRO, it may be necessary to hire a professional to do so. Either way, it is important to determine who will be responsible for preparing the QDRO before proceeding with a divorce.
Tip#4 Understand the Tax Implications of a QDRO
One of the most important things to understand about a QDRO is the tax implications. This is because a QDRO can have a significant impact on your taxes. For example, if you are the party that is receiving assets from a QDRO, you may be responsible for paying taxes on those assets. In addition, if you are the party who is responsible for preparing the QDRO, you may be required to pay taxes on the service. It is important to speak with an accountant or tax attorney to understand the specific tax implications of a QDRO before proceeding with a divorce.
Tip#5 Have an Experienced Attorney Review Your QDRO
It is important to have an experienced attorney review your QDRO before you finalize it. This is because a QDRO can be a complex document, and there may be errors that could result in the assets being divided incorrectly. In addition, an attorney can help to ensure that the QDRO is fair and equitable. Once you have an attorney review your QDRO, you can be confident that it will be accurate and will protect your interests. Having a QDRO reviewed by an attorney is a crucial step in the process of dividing assets in a divorce, so make sure to do it before you finalize anything.
If you are going through a divorce and have questions about how the Qualified Domestic Relations Order (QDRO) process works in Arizona, please call us today. We can help guide you through every step of the process and make sure that your assets are protected. Our team of experienced attorneys is here to help, so please don’t hesitate to reach out if you need assistance with QDROs or any other family law matter. Call us today to schedule a consultation.
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The attorneys at GillespieShields are well-versed in a variety of different legal fields, ranging from family law to civil suits, employment disputes and probate cases. Although we specialize in several areas of practice, our greatest passion is family law. We believe in giving families peace of mind no matter their situation, and we fight hard to maintain that peace. Whether you’re filing for dissolution or divorce, determining custody of your children, or thinking about adopting children, our experienced attorneys are here to help you every step of the way. During our private, one-on-one consultation, we’ll take the necessary time to answer any and all of our questions surrounding Arizona’s family laws, your family’s unique situation, and the possible court outcomes. Contact us today for your consultation!
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