California residents facing delinquent support payments face a number of options to try and collect. According to the Internal Revenue Service, a qualified domestic relations order issued by a judge can spell out how assets held in pensions or retirement plans are to be dispersed. However, a QDRO is not only used to divide a pension during a divorce proceeding, but can also be used to assist a spouse if that person is not receiving required support payments.
In addition to dividing up assets from a retirement account, a QDRO can set the terms of how retirement accounts are used to fulfill child support or spousal support such as alimony. An article posted on the Forbes website describes a scenario in which an ex-spouse refrains from paying child support, alimony or any fiscal obligation laid out in a divorce settlement. In such an event, a QDRO can be issued by a judge to take the funds directly from the former spouse’s retirement plan and award it to the other party.
Additionally, a QDRO may be used to collect support payments that have not been made in the past. However, the Forbes piece points out that a detailed review of the spouse’s retirement plan by an attorney may be necessary before any QDRO can be drafted. Some retirement plans do not allow for payments of lump sums, so QDRO payments may not be issued to a recipient right away. In this case, it may be necessary to calculate the proper value of future QDRO payment amounts.
It is also important to note that QDROs cannot be used to collect from all forms of retirement accounts. While a judge can issue a QDRO to collect from a pension, a 403B or a 401K, it cannot be issued to draw funds from an IRA. While a QDRO may be issued to collect from retirement plans governed under the Employee Retirement Income Security Act, IRAs and similar plans are not part of this law and are not eligible for QDRO withdrawals.