Sarah from Brooklyn, NY, asks, "Why should I hire a QDRO expert to prepare and moreso, submit, my QDRO, instead of using the Model QDRO available from the plan?
Spencer Olsen from Pension Evaluators & QDROS Of Troyan, Inc Associates Group, answers, "Some parties or attorneys will draft the QDRO by just inserting the parties' names and demographics into the plan's model or sample QDRO without any other revisions to it. This should never be done unless the parties and/or attorneys clearly understand every single provision within the model QDRO, and are aware of the possible alternate provisions, based on the plan's terms and 414(p) of the IRC. on marital property rights. Moreover, model QDRO's are designed in a manner to favor the plan participant and not to divide the benefits as equally as possible. Model QDROs can heavily favor the participant with regards to issues like investment earnings and losses, survivor benefits, and other things.
Further, the model QDRO may have been drafted in a different state than where the divorce took place, which can have a huge effect on the division of benefits. Let's take an example - in New Jersey, the equitable distribution interest stops accruing typically as of the date the complaint for divorce was filed. Concurrently, in California, the community property interest stops accruing on the parties' date of separation. Other states utilize other dates, such as the date of divorce filing, or the date of the entry of Judgment of Dissolution, both which may be years after the parties' date of separation. Utilizing a model QDRO from another jurisdiction could have the effect pf awarding the alternate payee far more benefits than he/she would legally be entitled. Further, many individuals who draft their own QDROs are not able to format the QDRO correctly to be accepted by the court that handled their divorce."