Separating to Cost More

Physician's Money Digest, January15 2005, Volume 12, Issue 1

When a couple goes through adivorce, among the assets at issue aretheir retirement plans. To split retirementaccounts like 401(k) plans andretain tax benefits, the couple must havea lawyer draft a Qualified DomesticRelations Order (QDRO). In makingsure that the QDRO meets the tax code,an employer can spend hundreds andeven thousands of dollars for legal andaccounting advice. Until recently, however,the employer had only two choices:Pay those costs or spread the cost amongall participants in the plan. Now, a USLabor Department bulletin has givenemployers the green light to charge theexpenses to the divorcing couple'saccounts—making an expensive divorceeven more costly.