If you are going through a divorce, and you have been awarded alimony or spousal support by a Clinton Township judge, you should familiarize yourself with a qualified domestic relations order. Commonly referred to as a QDRO, these orders are signed by a judge, and set up specific directions for how marital property or payments should be made to you.
According to the American Bar Association, the QDRO can be a useful tool when dealing with alimony. One way you can use the QDRO is to specify any interest that may be added to the payments themselves and to address the payment of attorney’s fees related to the collection of these payments. Of course, the costs of your attorney can only be added if the court has issued a decree, judgment or order concerning them.
Taxes are another issue that the QDRO resolves. Considered a form of income, you are required to pay state and federal taxes on any alimony you receive. However, your ex-spouse “is responsible for paying the income taxes for the distributions to” you as the person receiving them. To avoid any potential dispute from occurring between you and your former spouse, you should make sure that if you use a QDRO, your attorney drafts it so that this is clarified in the document.
The existence of a retirement plan can complicate things a bit, especially if you decide that alimony will be paid out of that plan. In some cases, it may be wise to disregard the use of a QDRO as it can interfere with the restrictions set on the plan, but it is still possible to use one. For example, if you are going to receive a lump sum from a defined contribution plan, then the QDRO should be written with that in mind. This information is merely for educational purposes and should not be read as legal advice.