By far, the most frequent question I get on Qualified Domestic Relations Orders (QDROs), is about the timetable: “How long will this take?” And while most lawyers will just say, “it depends,” I usually give a much more long-winded version of that. Here goes.
The average QDRO takes about a year and a half. I have handed some in as little as a few weeks, and I have seen some drag on for a couple of years. The reasons for delays are about what you would expect: uncooperative parties, slow courts, and slower retirement plans. On the flipside of that, the superfast QDROs get done when I get all the data I need upfront and I have motivated parties working to keep the ball moving. To elaborate further:
Uncooperative Parties: Most Common Roadblock, Easily Overcome
Nobody wants to sign over their retirement account. I get it. You get it. But here’s the thing: a QDRO attorney isn’t taking away anything you haven’t already signed over or have been ordered to sign over. When most cases get to my desk, they are either almost entirely settled (best case scenario) or they have already reached a conclusion in terms of the judgment of divorce, leaving me to clean up the loose ends of retirement accounts.
If you look at your divorce decree or settlement agreement, it should address retirement accounts. It probably, especially if you live in a community property state (states like California where the default rule is 50-50 property division, no matter who earned what) says something along the lines of “retirement account X to be divided by QDRO” without elaborating much further – 50/50 is assumed. Once you have signed that settlement agreement, or a judge has entered that order as part of the judgment, consider that retirement account already gone – by agreement or court order, it has already been set for division.
Now, that’s where I come in. Federal law, and similar state laws, require a special court order on top of the original agreement or order that we just talked about, to specifically divide the retirement plan. There are a lot of reasons for this, but consider it an extra protection of your retirement account, while also serving as an unfortunate redundancy in the legal process. Basically, the court has to order the retirement account divided twice. Some lawyers will stick the official QDRO language in the settlement agreement – skipping over the need for a separate second court order – but nearly all lawyers don’t, because retirement division law is actually extremely boring, intricate, and complicated, and only a handful of us actually understand it.
All of that is an extremely long-winded way of saying that while many people will refuse to sign their QDRO, to do so is really quite pointless, as you have already agreed to, or been ordered to, split that account. If you refuse to sign, all you’re doing is delaying the inevitable, because I will go to court and asked the judge to sign on your behalf. The plan will then be divided, and all you have done is delay the process and take yourself out of the equation entirely. There are a lot of ambiguities in most divorce settlement agreements or judgments, such as the right to survivor benefits (a payout if the employee spouse dies early) that can affect the amount you are paid monthly. Personally, I would want to have a say in whether those survivor benefits are elected. If you don’t cooperate though, you leave the QDRO lawyer and the court to fill in the blank — and that probably means we will assign whatever benefits we think are necessary to protect the cooperative party, and if the uncooperative party doesn’t like it, they aren’t signing anyway, so too darned bad.
Every Court is a Slow Court
It is a fact of life that every court in the United States seems to be overcrowded, underfunded, and staffed with overworked employees who have to process thousands of pages of legal jargon every single day. If your divorce was done in a crowded city, like Los Angeles or New York, where I get most of my business, delay is the rule, not the exception. I have had QDROs sit in court for three or four months without getting a signature. And I have had courts say that they are processing a QDRO for months, only to find out that it was lost in the courthouse or the mail, and nobody ever actually had it.
Again, this is the rule, not the exception. However, if you live in a more rural county, you might get lucky and have a speedy courthouse that signs things within days. Your luck may vary.
To compound the slow court rule, many courts still do not take filings electronically.
[Warning. Rant to follow. Feel free to skip it.]
In some of the larger areas, it’s even worse: they will take electronic filing on some cases, but not others, or in some counties, but not others. In California, they have been promising universal e-filing since I graduated law school in 2011. It is 2020, and they still have not mastered e-filing in Los Angeles County for family law cases. The next county over, Orange County, does accept e-filing. And don’t even get me started on New York City and how much I hate their system — apparently, you can only e-file QDROs on cases that were originally e-filed, and only contested cases are e-filed, with whereas uncontested cases must be paper filed. And while by definition, every e-filed case contains the electronic signatures, since you can’t electronically file in original real ink signature, and New York State law has made e-signature is perfectly legal since the year 2000, I recently had a three month delay while I taught my filing service and the court about electronic signatures on a case that had to be paper filed. (Basically, I sent the document to the parties to sign electronically since they could not stand to be in the same room as each other, then I sent the PDF files to a court runner, which attempted to file them in person but was rejected because the signatures were not original ink. I ended up calling the court at three in the morning, from Manila, Philippines, to explain to them how the laws in their own state worked.)
Retirement Plans Are Slow to Pre-Approve and Approve
Before I send a QDRO to the parties to sign, or to their attorneys, I usually send it to the retirement plan for preapproval. Preapproval is where the plan reviews a draft QDRO to tell me that it complies with all of their own internal requirements. Were I to skip this step, I would often have cases where parties and court sign off on a QDRO only to send it to the plan, and have it rejected. (This is one of the problems with those online QDRO mills that are not staffed with real attorneys — they just spit out a template court order but do not deal with the plan, preapprovals, reluctant parties, etc.) Plus, many courts are now requiring preapproval before the QDRO can touch the judge’s desk.
Once I get preapproval, I send it to the parties to sign. Once the parties sign — or I have confirmation that one of the parties will refuse to sign — the document goes to the court for the judge to sign. Once the judge signs, I have to get a certified copy of that QDRO from the clerk, and sometimes a certified copy of the settlement agreement or divorce judgment, bundled those together, and for that back to the plan for final division. Some plans, like fidelity, will wrap up final division in less than two weeks. Others may take months.
Sometimes, I Just Don’t Have Enough Information
To draft a QDRO, I need a lot of information:
- the parties’ personal information, including names, addresses, dates of birth, SSNs, phone numbers, email addresses;
- the retirement plan options, including survivor benefit options;
- account numbers, if the plan has account numbers (some just use SSN);
- the contact information for the QDRO processing department, which is often outsourced to a third party, such as QDRO Consultants or Morneau Shepell;
- for 401(k) or other defined contribution (cash in account) plans, if there is a nonmarital property in the account, such as contributions to your retirement before you got married, or after the date of separation, I may need statements for every month before and after the marriage so that I can do a rough calculation of what is marital and what is separate – if it is too rough, or there are no statements, I may send you to a CPA for some advanced forensic accounting;
And those are just the common scenarios. I include a lot of that information in my QDRO intake sheet, so that you can provide it at the outset and I can hurriedly prepare your QDRO, as I know that many people depend on the income from retirement accounts and delays mean they don’t have money to pay their bills or feed themselves.
You can help with this process: if I need information, I reach out to my clients immediately. Some of them respond within hours, which is amazing. Some of them won’t respond for months, then respond with a question about why their QDRO is taking so long — not as awesome. I try to respond to all client inquiries within 24 hours, and I ask my clients to do their best to do the same. Doing so just means you will get your QDRO behind you sooner.
Your Case Isn’t Settled Yet
Coming to me early is extremely advisable. I love when attorneys, or intelligent parties, contact me before signing away their retirement so that they can understand exactly what is about to happen.
Here is an example of what may happen if you do not talk to a QDRO attorney before you sign off on a settlement agreement: one party that recently contacted me had survivor benefits removed from her ex-spouse’s retirement account. Because the survivor benefits were already in place at the time of divorce, the attorney representing that client assumed that they did not need to be secured with a QDRO, which was a tragic assumption. The plan allowed the ex-spouse to change his benefits the moment the divorce was over to eliminate survivor benefits — meaning he got more per month, but if he dies before his ex-wife, she will get nothing. This particular woman was 15 years younger than her ex-husband, in better health, and had relied on him for 20+ years to provide for the family, meaning she had no marketable skills to reenter the workforce with, unless she wanted to head towards the unskilled labor line when he eventually passed, which will probably be when she is elderly herself.
Here is another example: I had a guy come in last week with a divorce settlement agreement with the most bass-ackwards back of napkin math I have ever seen done on retirement. The attorney who drafted this agreement rounded off numbers to the nearest thousand dollars, assumed that a pension (which cannot be cashed out until retirement age) was dollar for dollar equivalent to a 401(k) plan (a cash balance defined contribution account that can be cashed out immediately, albeit with tax penalties), and in doing so, ended up with three different values for the amount to be taken out of a 401(k) to offset the pension. Not only would that amount be inaccurate, because of the restrictions on a pension, and all of the rounding math, but like I said — the person came up with three different numbers in three different paragraphs, and never actually picked one to go with. Now, 10 years later, one of the parties has come to my desk and asked me to prepare a QDRO based on that. Which number? I guess we will have to see which one the parties can agree on, but if I were a betting man, I would surmise that no matter which number they pick, the two different plans will have grown at drastically different rates over the last 10 years and the rough math done to make them equivalent will prove to be absurdly unequal — one of these two parties is going to get shafted here.
All of that is a preface to say this: come to me early, while your divorce is pending, and I can review the settlement language that you are about to sign and tell you if you are about to immolate your future retirement income.
Now, on the other hand, I had another case come in recently where the parties were supposedly settled, a divorce have been entered, but somebody had left out retirement assets in that settlement. These undisclosed assets are now were under attack from the other side, and I cannot do a QDRO until they settle up on what they will do with those plans. I can, however, act as a voice of reason or clarification should they wish to discuss what the impact of any potential sentiment will be on both sides. In other words, it is a good idea to retain me either way — but if you haven’t settled your property division issues yet, understand that it will take a while before I can get to your QDRO.
Okay, so which cases move quickly?
After reading all of that, you are probably terrified that your QDRO is going to take years, rather than months. All of those horror stories are very common, but very avoidable. If you want your QDRO to get done quickly, here are a few things you can do to speed up the process:
- Talk to your ex-spouse, assuming you can, and warn him or her about what is coming. (Nobody likes to get a call from a stranger saying that they are about to take away part of your retirement account.);
- Gather every scrap of information you can possibly find on your divorce agreement before calling me. While I can go get copies of your agreement from the court, that typically takes a couple months for the court to make the copies and mail them out. The more information you can provide upfront, the quicker this goes.
- If you can retain me while both parties are represented by lawyers, this process gets even easier — each party has an independent lawyer that they can have review the QDRO. Or as I like to say, “the divorce lawyers can talk sense into the parties.” (I am obviously a lawyer as well, but most people are inclined to listen to “my lawyer” rather than a neutral QDRO lawyer, or worse, a QDRO lawyer hired by the other side that called them out of the blue.)
- Be responsive. If you get me the information that I need, and answer the questions I have quickly, I am much more able and willing to go the extra mile to push your QDRO to the other side, the court, and the plan with unusual haste. I like to go the extra mile for all of my clients, of course, but clients that give me what I need will naturally move quicker.
Hiring a QDRO Attorney Helps
I have been a divorce lawyer, I have been an unemployed lawyer couch surfing during the great recession, and I have been a student working three jobs to put myself through college. I grew up in a family with a single mother and four siblings. Cost is paramount, right? I get that many people want to choose the cheapest route forward, assuming that they can handle anything on their own with enough time and patience.
I probably won’t convince many people to walk away from document mill websites that promise you a $200 QDRO, turned around in a few days, or even in a few minutes. While these sites do have their purpose, I regularly get calls from people who started with these sites and then realized that the hardest part is not just the drafting of a court order — but the execution. Once I draft a QDRO, I still have to send it to the retirement plan for preapproval (both to make the plan happy and because many courts are now requiring this before the judge will even look at it), make any edits the plan requires, send it to the parties for signatures, fight with any parties that refuse to sign for months, send it to the court, and then take certified copies to the plan for final division. There are a lot of places in that chain were things can derail — getting around a reluctant party, for example, requires a lot of work and may require a motion to be filed with the court.
I do my best to keep my costs down so that I can keep my rates down. I charge flat rates so that everyone knows what to expect. But I do charge more than a document mill website, because I provide a lot more: you give me the information that I need, and I handle everything that you just read. I also keep you apprised as your case moves along. Plus, with a template, you have to hope that the template addresses the math correctly, the differences in each state’s property division law (some states, for example, make any stock market gains on premarital contributions to your retirement marital property, while other states assign those gains to the employee spouse’s separate pile), and provides enough instructions for you to complete everything above. And did I mention that with me, you will have far less interaction with your ex-spouse? Isn’t that alone worth the extra fee?
I offer free phone consultations. Fill out the form on any page, or click the contact button at the top of this page, to get in touch and we will schedule a time to talk through your QDRO and what you can expect moving forward, whether or not you retain my firm.