how does a qdro work 
according to the internal revenue service irs a spouse or former spouse must report the qdro benefits received as if he or she were a plan participant the qdro grants the spouse a percentage of the participant s investment in the contract with the numerator being the present value of the benefits payable to the spouse and the denominator being the present value of all benefits payable to the participant 1once the distribution is made the former spouse becomes responsible for any taxes due the former spouse can alternatively roll over the assets received from a qdro just the same as an employee could receive a distribution and roll it over into another retirement account however a qdro distribution that is paid to a dependent such as a child is taxed to the plan s participant 1if there is no qdro and the account holder distributes retirement plan assets to the former spouse then the account holder would be responsible for the taxes on the transferred assets in the case of a divorce or custody issue a family court judge may issue a qdro for a dependent qdro requirementsa qdro is only valid for retirement plans covered by the employee retirement income security act erisa this includes qualified plans such as 401 k s they do not cover iras 23to be valid a qdro must contain specific information 4the qdro cannot award an amount or form of benefit that is not available under the participant s specific retirement plan 1 retirement benefits from more than one retirement benefit plan can be subject to a qdro as long as it clearly states the benefits that are assigned to the former spouse the provisions in a qdro are not standardized and will vary based on the retirement plan type and the purposes of the order 5some plan administrators provide a standard qdro form limitations of a qdrorules imposed by the u s department of labor s employee benefits security administration restrict specific provisions from being included in a qdro the court order cannot force a retirement plan to disburse any benefit amount or option that is not provided through the plan in addition the qdro cannot require increased benefits on the basis of actuarial value from the retirement plan 6benefits cannot be required from a plan for an alternate payee when those benefits are already allocated to another alternate payee under the decree of a previous qdro for example in the instance of subsequent divorces and qdros the earliest takes priority for the designated benefit amount 6survivor benefitsadditionally the order must not require the plan to pay the alternate payee in the form of a qualified joint and survivor annuity qjsa for the lives of the alternate payee and their subsequent spouse 6a qdro may provide surviving spousal benefits to a former spouse under the plan benefits allocated to an alternate payee under a qdro are not available for a subsequent spouse to receive as survivor benefits under the retirement plan 5other qdro beneficiariesin some cases a qdro might be put in place for a relation other than a former spouse dependents might also qualify to receive the ordered benefits in such instances the alternate payee is a minor or is determined to be legally incompetent the order can require the benefit plan to make payment to an individual with legal responsibility for that payee this can include a guardian as well as a trustee who serves as the agent of the individual 7the plan administrator who oversees the retirement benefits subject to the order will determine if a qdro is a qualified domestic relations order in these circumstances plan administrators are then responsible for ensuring that their duties are fulfilled on behalf of plan participants and beneficiaries 