“QDRO review fees do not apply to every account. IRAs and government plans do not charge review fees,” noted Jessica Markham, a divorce lawyer at Markham Law Firm in Bethesda, Md. “Only some employer-sponsored plan charge review fees.”
The best way to avoid these fees is to know about them in advance, Markham explained.
“Often, the divorcing couple is equalizing many plans and distribution can be taken from a plan that does not charge such fees,” she said. “Alternatively, some plans charge lesser or no fees if you use their model QDRO. For example, some Fidelity-managed, employee-sponsored plans charge $300 to use their online automated system in, and up to $1200 if you deviate from their system.”
Most attorneys that are preparing divorce agreement and QDROs don’t find out about these charges in advance which leads to problems later, when the financial advisor figures out his or her client is taking a potential $1,200 hit.
Markham has one way to deal with a high QDRO fee: “You can negotiate which spouse pays the fee.”