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Let Us Help You Assign Your Retirement Monies and More

Assignment of Retirement Monies via QDRO, DRO, and Letter of Direction

Anne Prenner Schmidt uses her extensive training and acute business acumen to guide individuals through the emotionally complex process of assigning retirement monies and deferred compensation during the dissolution of their marriage.

The process by which the monies can be assigned, if at all, is contingent on the type of retirement plan and particular regulations of the IRS and Department of Labor. Anne is experienced in evaluating and drafting the appropriate Order as required by law and regulations, for a flat fee. Anne’s extensive training and knowledge covers qualified and non-qualified plans and plans covered by ERISA and those exempt from the statute.

Anne’s experience in these areas is reinforced by her LL.M. in Employee Benefits, which she obtained while also working for the U.S. Department of Labor Employee Benefits Security Administration. During her time with the Department, Anne focused on Fiduciary correction matters and was responsible for auditing VFCP applications. She is an adjunct professor at the John Marshall Law School, teaching legal writing for employee benefits.



Thank you for choosing The Law Offices of Anne Schmidt, LLC to assist you with the drafting of your Domestic Relation Order(s). Most likely at this point, your divorce is either finalized or nearing completion, and you are exhausted emotionally and financially. Our goal is to make this part of the process as painless and transparent as possible for you and to be here every step of the way for any questions that you might have. The following are probably just a few of the questions you would like answered:

What is a QDRO?

A QDRO is a Court Order required by both the IRS and the Department of Labor in order to assign retirement money (i.e. Pensions, 401(k) Plans, Cash Balance Plans, ESOPs) to a former spouse. Normally, you can’t touch your employer-sponsored retirement without jumping through lots of hoops and hurdles, and even then, there are massive penalties attached to doing so. However, divorce is an exception to this rule, allowing you to assign this money without the tax ramifications through the entry of a QDRO. All of this is controlled by a Statute called The Employee Retirement Income Security Act of 1974 (“ERISA”) that I just happen to have a Master’s degree in.

What is a QILDRO?

A QILDRO is a Court Order similar to the aforementioned QDRO, but for a Plan administered by the State of Illinois. Unlike Federal law, which controls private employer plans, state plans such as Teacher’s Pensions, Firefighters, Police… are controlled by Illinois Pension Law.

Do I need a QDRO to divide an IRA?

No. Typically, dividing an IRA only requires a letter of direction. These forms are usually easily found on the Administrator’s website and I am happy to walk you through how to fill out the forms (or advise your financial advisor accordingly).

How much does it cost?

My firm charges $680.00 to $1000.00 to draft each Order. Although this fee does not include us entering the Order into court for you, it does cover everything necessary to prepare the QDRO for entry into court, such as reviewing the plan documents and statements, communicating with the retirement plan administrator to make sure everything is approved and done properly, and drafting the Order. In addition, if for some reason we need to redo something, these costs are included in our flat fee. Typically, your divorce attorney will enter the Order for you in court and obtain the certified copy, which is required to be sent to the plan administrator. If you need me to enter it, or you want me to find someone to enter it for you, then we can talk about that as well.

How fast does all of this happen?

We are pretty fast, but sometimes the plans - not so much… We have to wait for them to approve things and that can take some time. Once the plan administrator receives the Order that has been entered by the Court, they legally only have 60 days to tell you whether it is “qualified” or not - meaning it has passed muster and the money will be segregated from your spouse’s plan and assigned to you. At that point, the plan administrator will send you a letter saying everything is approved along with distribution forms asking you what you want to do with your money.

What if my QDRO is rejected or not preapproved?

Often times, due to constant market fluctuations or minor changes that the plan requires to the Order, we can receive a letter asking us to make changes before the plan will accept the Order and assign the requisite monies. This is quite normal in the process and nothing to be alarmed about, any changes that we need to make to the Order to get it approved by the plan are included in your flat fee. We have a very strong knowledge of which plans require preapproval or may require tweaking of our Orders and will advise you accordingly during the process. The most important thing is to not be alarmed if you receive a letter from the plan saying changes are required, we are on it and will help implement those changes to make sure your Order is approved and the money is assigned properly.

What’s a Participant and what is an Alternate Payee?

The Participant is the member of the plan and the Alternate Payee is the person receiving the money from the member’s plan in the Marital Settlement Agreement - for example, John Smith is a participant in the ABC 401(k) Plan and Sally Smith, his ex-wife, is the Alternate Payee. The plan will require up to date personal information for both the Participant and Alternate Payee to approve the assignment, we will send you an addendum form asking you for all of this info. If you are uncomfortable giving it via email, just call us and we will happily take it over the phone.

What do I do with my money?

Well, I am not a financial advisor, so I cannot advise you the best way to invest or spend your money ( I can refer you to great ones if you need one) - but, what I can tell you is if you take a distribution (on a plan that allows a distribution like a 401(k)) you will pay taxes on the distribution, and if you roll over into an IRA you will defer your taxes. Regardless, as I mentioned earlier, you avoid the 10% excise tax penalty through this nifty QDRO.

How much do you charge outside of the flat fee?

If you need work done above and beyond the flat fee, my rates are $300.00 an hour. Because I have a Masters in Benefits, I often help people figure out their health care issues in divorce (i.e. COBRA vs. Illinois Spousal Continuation Coverage and Qualified Medical Support Orders). You need those to have access to your kid’s medical plans if they are covered under your former spouse. I also do mediation and collaborative law, basically, any family law that is not litigated. My website is

How do I get in touch with you?

Email or call me anytime. My office number is
(847) 926-7679 and my cell is (312) 208-7389. My email is .

I look forward to working with you!


Anne Prenner Schmidt