Section 16.20 Separate Interest Qualified Domestic Relations Orders

• Library: Family Law Deskbook and 2014 Supp

b. (§16.20) Separate Interest Qualified Domestic Relations Orders

A “separate interest” QDRO is a QDRO in which the alternate payee’s interest is more personal and holds substantially less risk of forfeiture or termination. The separate interest QDRO also affords more flexibility for the alternate payee. In addition, from the perspective of the plan administrator, the separate interest QDRO is most advantageous if the plan document provides for immediate distribution of the alternate payee’s interest, which is most often found in defined contribution plans. By effectuating a QDRO that would provide the alternate payee the option of immediate distribution, either in a lump-sum distribution form or benefit or rollover to an IRA in the name of the transferee spouse, or as soon as is practicable under the plan’s administrative practices, the plan administrator simply has one less account to administer and safeguard.

When a division of a qualified plan is made under a QDRO, it is important for the court or the parties to specify the date on which the division is to be effective. This is particularly true within the context of separate interest QDROs, but the need for date specificity is also crucial in a stream of payments QDRO.

If the date-of-division language is nonexistent or is otherwise ambiguous, unanticipated results can occur. See, e.g., Riener v. Riener, 926 S.W.2d 6 (Mo. App. E.D. 1996). It is important that the judgment decree or marital settlement agreement be clear as to the division date as well as whether the alternate payee is entitled to share in earnings or losses, contributions, and forfeitures. Once the division scheme is clear to both parties, care should be taken to ensure that the division...