Any money that was put into a retirement account during the marriage is community property and is subject to division. If one party is going to receive a portion of the other party’s retirement account, the court must sign a Qualified Domestic Relations Order (“QDRO”) along with the divorce decree. This applies to any type of retirement benefit – 401(k), 403(b), pension plan, government retirement benefits, military retirement benefits, etc.
Generally, every QDRO is different. Each retirement fund administrator will have its own sample language for how it wants the QDRO written. QDROs are rejected on a regular basis for not meeting the requirements of the particular program. It is a very good idea to have an attorney handle the QDRO to make sure it is done properly.
When the retirement benefits are split, there may be fees and taxes involved if one party decides to cash out the account. A financial advisor should be able to help you understand the financial ramifications of cashing out an account after it is split in a divorce.