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Recent legislation created an update for "The Tax Consequences of Dividing Retirement Assets at Divorce," in the September issue.
On August 20, 1996, President Clinton signed new tax legislation into law. According to John Zimmerman, author of the article, one of the provisions deals with Qualified Domestic Relations Orders (QDRO). Act section 1457(a) requires the IRS to develop a model sample language form for QDROs by no later than January 1, 1997. The sample language must focus on the need to consider the treatment of any lump sum payment, qualified joint and survivor annuity (QJSA), and any qualified preretirement survivor annuity (QPSA). This change should come as welcome relief to the courts and practitioners who have struggled to determine what language is needed to meet the QDRO requirements of section 414(p).
The new law also requires a model spousal consent form when waiving the QJSA and QPSA benefit. The committee report states that the form must be written in a manner which will be understood by the average person. *
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