A court order was issued for a QDRO settlement for half of my retirement and half of my 401K plan to my ex spouse, which

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Customer: A court order was issued for a QDRO settlement for half of my retirement and half of my 401K plan to my ex spouse, which was a certain amount in September 2014. The divorce was final however, it has taken almost 5 years to finalize the payment of the retirement and the 401K amounts that are due to my spouse. I just learned that even though the court ordered a certain amount from the date of separation, that my ex spouse is entitled to gain/losses up until last week, which is an additional amount of almost $100K. Is this correct, these monies for gain/losses can be awarded to her.
JA: Were any of the assets acquired before the marriage? Or given through an inheritance?
Customer: None given through an inheritance. I think the answer is yes for assets acquired before the marriage, if you are referring to fund amounts that were invested into my 401K and the profit sharing plan through my employer.
JA: Where are you located? Divorce laws vary by state.
Customer: California
JA: Anything else you want the lawyer to know before I connect you?
Customer: I believe that's it, thank you.
Answered by SuccEsq in 2 hours 2 years ago
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SuccEsq
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SuccEsq, Expert

Accounting for gains and losses is common and recommended when drafting language awarding retirement account assets. It is designed for the the parties protection during the specific circumstances you are facing where for whatever reason the execution of the QDRO is done a while after the court order is entered. Doing so is considered fair this way the parties share equally in the gains and losses in the account. The QDRO although a separate court order has to mirror the language in the divorce settlement/decree.

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Customer
Thank you for this information. Just to clarify, can you tell me at what date is used to determine the end/close of gains and losses? Is it the date of that the QDRO was drafted, or the date of the court order? In specific, there were 2 QDRO's for this case, the first one was drafted, however, the amount of the QDRO vs. the court order differed. Thereafter, the ex spouse did not refile for the second QDRO up until almost 5 years later. The question is, I am paying the gain and losses from the date of the first QDRO, or is it from the second QDRO. Also, I'm not clear of how I should be penalized for the ex spouse not filing for the second QDRO years later...why should I have to pay gain and losses during this time. Thank you very much.
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SuccEsq, Expert

The amount is usually calculated from the date of dissolution but can differ. The date would be in the decree. So the gains/losses would be from then to second qdro. You aren’t really penalized because let’s say she is awarded 100k. If she took it out immediately your account would be down that amount and your investment will grow from what remains going forward. Now here if she gets the 100k you are still loosing the 100k which you would have you are now just also loosing the gains on the 100k. The gains that the remainder of your investment earned are still yours. It’s really just a matter of losing the money then vs now.
Customer
Thank you. I will call you tomorrow, it's challenging to write in an email. Your advice has been very good, thank you.
Customer
Thank you. You have answered all of my questions. If I need further assistance, I will be sure to contact you. Surely appreciate you!!!
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SuccEsq, Expert

You are welcome.

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