When you become involved in a divorce, you’ll be exposed to the legal system, where many of the terms used may seem like a foreign language. In an earlier post, we looked at what a divorce complaint is and what it includes, as well as the concept of equitable distribution. Here are some additional terms that should know and understand.
- A qualified domestic relations order (QDRO)—A qualified domestic relations order is a legally enforceable document customarily used to address the distribution of retirement plan assets during a divorce proceeding. A QDRO can be used to divide IRA, 401k, and other pension funds. One of the key benefits to using a QDRO is related to taxation of the funds. As a general rule, when you withdraw funds that you contributed on a before tax basis, you must recognize tax on the withdrawal. However, with a QDRO, funds from a qualified plan can be transferred without any tax consequences. The party making the tax-free transfer may set conditions on access to the funds, limiting the recipient from withdrawing until the transferor begins to withdraw. The transferor may also limit who can be named as a beneficiary of the funds.
- Final divorce decree—When the parties have come to a resolution of all issues related to a divorce, whether through a negotiated settlement, mediation, the collaborative divorce process, or trial, the divorce is still not final until a final decree, or order, is drafted, approved and signed by the judge. The final decree will identify specific details related to custody and visitation, child support, spousal support or alimony, and the division of marital property. Both parties will be entitled to a copy of the final divorce order. Violation of any of the terms of the order can be the basis for contempt proceedings against the violator.
At the office of Joanne E. Kleiner & Associates, we have more than 25 years of family law experience. We’ll help you stay focused on what matters. To schedule an appointment with an experienced Pennsylvania divorce attorney, contact our office online or call us at 215-886-1266.