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At the time of divorce or dissolution of marriage, plan benefits may be divided between the participant or member and that person’s spouse. In order to effectuate a division of the pension benefits in the state of Michigan, a Qualified Domestic Relations Order (QDRO or DRO) must be prepared and submitted to the Plan Administrator. The Orders generated by our online service are specific to each System or Plan.
(all QDROs are $299)
In Michigan vested pensions are marital property. A pension vests when all the requirements to receive the pension have been met. Unvested pensions are also marital property. Until the pension has vested, the person under whom the pension is maintained has only an expectancy of interest in the pension.
Several different methods of valuation are used in determining how much a marital asset is worth, depending upon the asset to be valued and the level of agreement between the parties. Courts generally accept the value when the spouses mutually agree on a value of a particular asset. Experts may be retained by the parties or by the courts to determine the value of marital assets if the parties cannot agree. Such experts may include accountants, real estate or business appraisers, or pension valuators. The use of experts adds to the cost of the divorce.
In Michigan if spouses share in each other’s retirement or pension plan, a Qualified Domestic Relations Order must be completed. A QDRO is a written set of instructions that explains to a plan administrator that two parties are dividing pension benefits. The instructions set forth the terms and conditions of the distribution - how much of the benefits are to be paid to each party, when such benefits can be paid, how such benefits should be paid, etc.
Retirement Assets and Pensions benefits are not part of the marital estate unless the parties so agree. Each distinct component of a pension plan must be specifically awarded in the divorce judgment. The right of survivorship in a pension plan is given to the divorced spouse unless it is specifically included as part of the pension award in the judgment of divorce. Generally, only benefits earned during the marriage will be awarded in a divorce, unless they contributed to the acquisition of the benefits or the award to the claimant spouse from the marital estate is insufficient to maintain them.
