CDS CDS Post-Divorce Planning & Support

Question 1

What is a Qualified Domestic Relations Order (QDRO) and why is it important post-divorce?

Accepted Answer

A legal order that divides retirement plan benefits between divorcing spouses without triggering early withdrawal penalties

Answer

A QDRO is a court order that legally divides qualified retirement plan benefits between divorcing spouses, allowing the transfer without early withdrawal penalties or immediate tax consequences.

Question 2

After a divorce is finalized, which beneficiary designations should be reviewed and updated immediately?

Accepted Answer

Life insurance policies, retirement accounts, and any payable-on-death accounts

Answer

Life insurance, retirement accounts, and payable-on-death accounts pass directly to named beneficiaries and bypass the divorce decree, so they must be updated promptly after divorce.

Question 3

What is the primary purpose of an alimony (spousal support) order post-divorce?

Accepted Answer

To help the lower-earning spouse maintain a reasonable standard of living and achieve financial independence

Answer

Alimony is designed to address economic disparities between spouses and help the lower-earning spouse maintain financial stability while working toward self-sufficiency.

Question 4

Which type of alimony is typically awarded for a set period to allow the recipient to become financially self-sufficient?

Accepted Answer

Rehabilitative alimony

Answer

Rehabilitative alimony is time-limited support intended to help the recipient spouse gain education, training, or work experience to become financially independent.

Question 5

Under the Tax Cuts and Jobs Act (TCJA) of 2017, how is alimony treated for tax purposes for divorces finalized after December 31, 2018?

Accepted Answer

Alimony is not deductible for the payer and not taxable income for the recipient

Answer

For divorces finalized after December 31, 2018, the TCJA eliminated the alimony deduction for the payer and removed the income inclusion requirement for the recipient.

(CDS) Certified Divorce Specialist Practice Test

(CDS) Certified Divorce Specialist Practice Test

CDS CDS Post-Divorce Planning & Support