The division of property during a divorce can be a complicated issue. Estranged Ohio couples should be aware that dividing retirement accounts, can also be expensive. Individuals who have 401(k) plans and who are getting a divorce will have to pay a fee when they divide the contents of their accounts. The fee is assessed for the processing a qualified domestic relations order. Sometimes, the fee is not assessed as a separate charge by an employer. Instead, it is integrated into the costs of the plan.
However, if a third party is responsible for handling the administrative and record-keeping duties of the 401(k) plan, the QDRO fee can be at least $300 and can quickly more than double. The fee would be in addition to the attorney fees that the account holder would pay to have the order prepared.
Charging exorbitant transaction fees is one method third-party administrators and record-keepers for 401(k) accounts use to increase their profit margins and remain competitive with record-keeping charges. The sponsors of retirement plans can be held liable for failing in their fiduciary duty by not negotiating for reduced fees.
Concerns about the QDRO fees have resulted in many other legal issues. Divorce attorneys assert that the language and format required by the third-party administrators are too strict. Class-action attorneys believe that there is potential for a lawsuit regarding excessive fees. On the other hand, the third-party administrators claim that many attorneys are not well-versed with the laws pertaining to retirement benefits and QDROs.
A divorce attorney may advise clients of which properties to retain ownership of in order to achieve their financial goals. The attorney may also make sure that a client's rights and interests are protected during negotiation or litigation of property division issues.