On behalf of The Law Office of Gustavo E. Frances, P.A.
Most Florida spouses are aware that property division will take center stage as they bring their marriage to a close. Issues surrounding the division of marital wealth are important, as the outcome of this process will have a lasting impact on both spouses’ financial stability for many years after a divorce. It is important to be aware, however, of some of the less obvious costs associated with property division.
An example lies in the fees that are charged to prepare a qualified domestic relations order or QDRO. This is the paperwork that is used to direct the division of funds held within a 401(k) account. The document contains a great deal of legal language, and mistakes in the QDRO can cause continuing legal issues.
Some companies charge a small fee for preparing the QDRO, up to or around $300. Other plan administrators, however, tack on a hefty fee for the same service, up to or even in excess of $1,200. That can come as an unwelcome surprise to a spouse who is already looking at legal fees and other expenses related to the divorce.
QDRO fees are difficult to dispense with, as the individual who holds the account has very little leverage with the plan administrator. However, having advance notice of these fees can help during divorce planning. Spouses who are aware of the charges can include those fees in the negotiating process. In some cases, it may make more sense to simply leave the plan intact and to cede a greater share of other assets to the other party during the divorce. Each and every Florida couple will approach the matter differently, according to their own property division needs.
bloomberg.com, “ The Divorce Penalty: This 401(k) Fee Can Add Insult to Injury“, Suzanne Woolley, Jan. 23, 2017