Conclusion: Comprehensive Divorce Financial Planning
When finalizing a divorce, it is imperative to file the QDRO with the plan administrator even if there are no intentions of claiming benefits soon. The receiving spouse should begin the process immediately, since delaying a QDRO could potentially cost them valuable benefits or other delays. There is the risk of the receiving spouse forfeiting benefits or losing money if the member spouse retires, remarries, dies, quits, is fired, withdraws funds from plan, or takes out a loan before the QDRO is filed.
Although the filing of a QDRO can be time-consuming and result in additional legal costs, it is in the best interest of the receiving spouse to initiate this process and stay on top of it. Doing so will help secure these funds and protect their financial future.
Beyond creating and filing a QDRO, there may be many other financial planning considerations to review during a divorce. Dividing retirement accounts during a divorce important, however, cash flow analysis, estate planning, and income tax planning is also critical. Working with a qualified divorce financial planner and Certified Divorce Financial Analyst or CDFA® is critical to avoid potential pitfalls. Be sure to make the necessary inquiries and consult with a Round Table Wealth Advisor to identify any planning opportunities that may arise from this process.