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Do I need to create a QDRO during divorce mediation?

Qualified domestic relations orders are commonly used documents for divorcing San Francisco couples. These documents are typically used when dividing a marital retirement plan, and allows individuals to make withdrawals for the purpose of asset division without incurring related fees or penalties. Making withdrawals without a QDRO can be costly or may even lead to the wrong beneficiary of life insurance policies receiving funds. However, a federal appellate court recently determined that a man's divorce decree could be used in place of a QDRO, which could have certain implications for the future of divorce mediation.

The man finalized his divorce in 2006, and their divorce agreement outlined that both parties would continue to maintain their employer-based life insurance policies, which would benefit their daughter until age 18 or her high school graduation. The man's life insurance policy listed an uncle as the beneficiary at the time of his divorce. He never updated the named beneficiary, and died back in 2013.

The uncle went to court over the life insurance proceeds and was apparently under the impression that he was the intended beneficiary. It was ultimately determined that the divorce decree contained all of the necessary components of a QDRO, including necessary names, addresses, payment percentages and number of payments. Opposition from the insurance provider was not compelling enough to change this ruling.

It is not advisable to forgo a QDRO when dealing with retirement accounts, life insurance policies and other important assets. However, this ruling could potentially affect how future decrees are viewed. As such, it may be a good idea for San Francisco couples to include all relevant QDRO information during their divorce mediation proceedings.

Source:, "Court Finds Divorce Decree Qualifies as QDRO," Rebecca Moore, Dec. 27, 2017

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