Courtney ∙ Clark Law, P.C.Courtney ∙ Clark Law, P.C.
Practice Areas

Benefits of a QDRO

Illinois spouses who are preparing for or who are already in the midst of getting a divorce understand all too well the many issues with which they have to contend. In addition to deciding who gets what in the house and even who might get the house or if it should be sold, some people may need to consider splitting their retirement accounts with their spouses. This can understandably sound a bit scary as the thought of taking money from a retirement account for purposes other than retirement may raise concerns about taxes and penalties.

In most cases, any non-retirement distribution may well be subject to early withdrawal penalties and income tax. However, as Forbes explains, when a Qualified Domestic Relations Order is in force and the distribution is pursuant to the QDRO and a divorce decree, there is the potential to avoid these penalties and taxes.

The U.S. Department of Labor indicates that a QDRO establishes the non-participant spouse as an alternate payee on the account. If the alternate payee then receives money from the account as stipulated in the QDRO and reinvests those funds in another qualifying retirement account, no early withdrawal fees or taxes will be owed. It is important to note that the QDRO is only necessary for certain types of accounts like 401(k) plans.

It is also possible to use a QDRO to allow a spouse to access retirement account funds to satisfy awards for spousal support or child support. In these instances, payments may be able to be made on a regular basis over the course of time. Alimony remains taxable to the recipient spouse while child support is taxable to the paying spouse.

No Comments

Leave a comment
Comment Information
Email Our Attorneys

Schedule A Free Consultation Experienced representation does not have to be out of reach financially. Call 618-207-3458 (toll free 866-921-8767) or contact us online to schedule a free consultation. Each of our lawyers has a strong reputation in the Belleville legal community. We will give you an honest assessment of your case and help you understand how we can help you.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Courtney ∙ Clark Law, P.C.
104 South Charles Street
Belleville, IL 62220

Toll Free: 866-921-8767
Phone: 618-207-3458
Fax: 618-234-8028
Belleville Law Office Map

  • Google Map Image
    • ABA - American Bar Association
    • Illinois State Bar Association
    • County of St. Clair - State of Illinois
    • IACP | International Academy Of Collaborative Professionals