The Impact of Defense of Marriage Act (DOMA) Ruling on Dividing Retirement Plans in Divorce (Aug 2013)

The recent ruling striking down the Defense of Marriage Act (DOMA) has had a significant impact on divorcing same sex couples, including their retirement plans. Divorcing opposite sex couples have had the benefit of dividing their retirement plans through a Qualified Domestic Relations Order (QDRO), which is a federal protection. A QDRO allows a spouse to access a share of the employee spouse’s pension without paying any taxes or penalties, by simply rolling a portion of the plan into their name. This is a significant benefit, and sometimes critical for spouses that do not have other assets to offset the value of a retirement plan, meaning there is no other way to buyout the non-employee spouse of his or her interest in the retirement plan. QDROs are typically done at the time of a divorce judgment and cannot be done prior. Up until the recent Windsor Supreme Court Ruling, striking down the Defense of Marriage Act (DOMA), same sex married couples did not have the same benefit. The ruling will now allow same sex married couples to divide their plans through a QDRO as well. How will this effect Domestic Partners? It is unlikely they will afford them the same protections, but we are yet to have all of the answers on how the law will be interpreted. It is unclear whether any benefits may be provided retroactively. We shall stay tuned.

Read more about how the striking down of DOMA as unconstitutional will impact legal rights here: http://www.foleyhoag.com/publications/alerts-and-updates/2013/july/supreme-court-finds-doma-to-be-unconstitutional

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