If a Florida couple needs to divide a 401(k) or another type of workplace pension plan as part of a divorce agreement, they will also need to get a document known as a qualified domestic relations order. A QDRO allows for a distribution in case of divorce without incurring taxes or penalties.
Because errors can be costly, a QDRO must be carefully prepared. It should be created in consultation with the plan administrator and reviewed by the couple and their attorneys to ensure that it reflects the divorce agreement's intent. The QDRO should also indicate whether a person is going to receive the distribution directly or roll it over into an IRA. In the former situation, the receiver will need to pay regular taxes on the distribution.