New Mexico is a community property state. That means every asset or debt the couple acquired during their marriage, including retirement accounts, must be divided.  Essentially any retirement benefits acquired or vested during the marriage belong to the community.   Likewise, any benefits acquired before the marriage are considered separate property.

Money Rolled In A Nest "Nestegg"

Under New Mexico community property laws, anything acquired during your marriage is considered community property. That means the value of all those debts and assets need to be split equally. That means the only issue to be determined is when the retirement benefits vested. You can easily find this information out  by contacting the plan administrator or going over the statements associated with the benefits.

While this might seem simple enough, the division of retirement benefits can often be very hotly contested in a divorce.  It is not uncommon for one or both spouses to have a 401k and a pension plan or multiple retirement savings accounts. Furthermore, because the retirement benefits are often the most valuable asset one or both of the spouses possess, it is very important to understand your rights and the law regarding the division of retirement benefits so that you receive your fair share of those benefits.

Don’t take the first offer your spouse makes just because you want to settle the divorce and move on with your life. Our Albuquerque Divorce Lawyers can help you understand your rights and options so that you receive a fair shake in any property division. We have extensive experience in New Mexico divorce and family law that will benefit you during divorce, custody or child support cases. Chat with someone online now or call us at (505)-317-4455 to start your case strategy session.

Do I Need A Court Order To Divide Retirement Benefits?

In short, the answer is yes. In order to divide and collect your community retirement benefits, a Qualified Domestic Relations Order, or QDRO must be submitted to the plan administrator.  Most plans have specific and strict requirements regarding the form and content of the QDRO.  This may mean that the QDRO must be submitted more than once prior to approval.

 

What Is A QDRO?

In order to divide retirement benefits, a Qualified Domestic Relations Order or (QDRO) must be filed with the court, endorsed and then forwarded to the plan administrator.  Most plans will have their own form of QDRO.  The administrator’s requirements must be followed exactly or the Order will be refused.You must also submit a certified copy of the QDRO to the plan administrator.

Submission and approval of the QDRO can be a rather tedious process as some plan administrators require the Order be filed and signed by the judge before they will review it to determine whether it meets their requirements.  If it is refused, the QDRO must be modified, refiled with the Court and signed by the judge again.  Then the QDRO must be resubmitted to the administrator beginning the cycle anew. As you can imagine, the process and also be time consuming.

Does The Court Decide How Benefits Are Divided?

Oftentimes, the parties do not agree on the form or the contents of the QDRO requiring the judge to decide.  However, the plan administrator, not the judge, determines whether the QDRO will be finally accepted.

Like any other issue related to the New Mexico divorce and division of property, the parties often do not agree on the terms of the division of retirement benefits or the essential terms of the QDRO.  The process is made significantly more complicated when the parties cannot agree on the terms to be put in the QDRO, or when there are multiple QDROs in play.

In those cases where the parties cannot agree on the terms of the QDRO, the Court’s intervention and direction is required.  Yet even then, the QDRO may take a couple of submissions and modifications prior to approval by the Plan Administrator and final division of the benefits between the parties.

This is due to the fact that the final decision to accept the QDRO belongs to the QDRO plan administrator. The Court can help set the terms of the division but cannot dictate the presentation or form of the QDRO to be accepted by the administrator.

Do I Need A Lawyer If The Plan Administrator Reviews the QDRO Anyway?

It is possible that the QDRO will meet the plan’s requirements for filing yet still be calculated wrong or unfairly to one of the parties.. It is up the parties to get the division correct.

It is important to recognize that the plan administrator is looking to make sure the form submitted meets the plan’s technical requirements.  The administrator will not look to the substance. 

In other words, it is up the parties, and their lawyers if they have them, to determine the proper dates and amounts into the QDRO.  As they say, garbage in, garbage out.  It is possible that the QDRO will meet the plan’s requirements for filing yet still be erroneously calculated.

How To Get Help

Because of all the challenges and complexities of the QDRO, it is important to seek legal guidance. Remember, your retirement benefits are a large, long term asset that at some point will become a financial cornerstone in your life. Paying a little now can save you a lot of money later. 

It is just as important to make sure you understand the rules regarding community property in New Mexico so that the final division of retirement accounts upon acceptance by the plan is fair to you under the law and in the context of your marriage. 

If you have questions or concerns about property division or New Mexico Divorce, contact our Albuquerque divorce lawyers at 505-317-4455 or chat with someone on our website to set up your case strategy session.

Anthony Spratley
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Experienced Divorce, Child Custody, and Child Support Lawyer Serving Albuquerque and Beyond