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Divorce lawyers are generally familiar with QDROs to divide pension plans as part of a divorce settlement, but QDROs can be used for more than division of marital property. Very few lawyers realize that QDROs can also be used to provide child support, particularly when the payments are past due. Many successful, high-powered divorce practitioners are surprised to learn that QDROs are available for child support payments. Many child support enforcement agencies now rely on QDROs as the primary enforcement tool against deadbeats who fail to make their support payments.
QDROs can only be used in certain circumstances, that is, when the order "relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant," and "is made pursuant to a State domestic relations law (including a community property law)," according to the I.R.C. §414(p)(1)(B). The overwhelming majority of QDROs are used to divide marital property (such as retirement plan benefits); however, the code is very clear that QDROs can also be used to procure child support and maintenance payments, regardless of whether they are current or delinquent.
Moreover, when a worker who has a support obligation loses his or her job, there may still be retirement funds available to make support payments. This is true for both 401(k) plans and traditional pension plans even if the participant is too young to be eligible to receive payments.
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