OLDER, LUNDY & WEISMAN has a statewide practice consulting on and preparing Qualified Domestic Relations Orders (QDROs) and other orders and legal mechanisms used for dividing retirement assets including:
- Defined Benefit Retirement Plans (typically pensions)
- Defined Contribution Retirement Plans (typically 401(k)s)
- Military Retired Pay
- Civil Service Retirement System Plans
- Federal Employees Retirement System Plans
- Individual Retirement Accounts
- Qualified State and Municipal Plans
The division of retirement assets in family law cases is often a complex task. Time is truly of the essence when it comes to dividing these assets properly. Generally speaking, the proper legal division of many retirement assets is a multi-faceted process. First, the parties must identify all retirement plans. Second, the parties must determine what those plans consist of (i.e. cash, stocks, stock options, etc.), and what of those assets is marital versus non-marital. Third, the parties must determine what steps are necessary to divide said assets (i.e. is a QDRO necessary?) Fourth, the parties must accurately contract for the specific benefits that they will receive under any QDRO or similar order designed to divide a retirement asset. Finally, the appropriate order for division of the retirement asset, along with any other necessary forms, must be drafted, approved, and entered by an appropriate court of competent jurisdiction.
Because the division of retirement assets generally requires a working knowledge of the issues associated with drafting these orders, many lawyers simply do not know what they are getting themselves into when deciding that they are capable of drafting a QDRO or similar order, or even in drafting language in a marital settlement agreement regarding retirement assets. A knowledge of how to properly draft these orders require an understanding of federal law far beyond that of the typical family law practitioner, and that is why we are here to help.
At OLDER, LUNDY & WEISMAN, we provide a level of service related to QDROs and similar orders that is unmatched. If you engage our services, you are engaging fully licensed attorneys who understand that the process of obtaining and having one of these orders entered is often a mystery to clients and many practitioners alike, and we are here to walk you through the process and give you the peace of mind that you want and deserve. Perhaps more importantly, you are shifting your legal malpractice liability with respect to the orders themselves, and saving yourself a lot of explaining if your client does not get what they expected.
What is a QDRO?
A QDRO is, in simplest terms, a domestic relations order used to obtain an interest in an employee-participant’s qualified retirement plan for a spouse, former spouse, child or other dependant of the employee-participant. The QDRO was created as an exception to the anti-alienation provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”) to protect an employee’s dependants or former spouses from an inability to receive property support or division of property. To clarify, QDROs are only necessary to divide qualified plans, which are plans that qualify under ERISA and the Federal Tax Code.
What does a QDRO do?
Generally speaking, a QDRO is used to divide a retirement account, and create a legally recognized interest for an “alternate payee,” who is a spouse, former spouse, child, or other dependant of an employee-participant. QDROs are used to divide property, provide support for an alternate payee, and may also be used to obtain attorney’s fees.
Are there any other types of retirement plans that require that a special order or legal mechanisms be entered to receive an interest in that retirement plan?
Yes, but these Orders are not provided for under ERISA, and there are a different set of rules governing them. Virtually every type of retirement account is governed by a different set of federal laws, and we are well-versed in all of them. We are more than ready to advise you on and take all drafting responsibility for any order directed to any retirement plan, including federal and state government retirement plans.
Do QDROs only come into play as part of a Final Judgment of Dissolution of Marriage?
No. In addition to being useful tools for providing for support and/or property division as part of a final resolution of a divorce case, QDROs can also be used in almost any initial and post-judgment family law case, including paternity cases, and also in the temporary relief stages of a family law case. Specifically, a QDRO can be used to i) provide for an interim partial equitable distribution; ii) provide for temporary support and attorney’s fees; and iii) purge contempt.
Do attorneys ever hire OLDER, LUNDY & WEISMAN to draft their QDROs and similar orders used to divide retirement assets?
Yes. Attorneys will likely want to engage OLDER, LUNDY & WEISMAN, either directly or indirectly by advising their client to do so, to shift their legal malpractice liability to us. All too often, these types of orders are sent to non-attorneys, who simply create further malpractice exposure in that they are not trained professionals in legal writing and analysis.
When is the best time to hire OLDER, LUNDY & WEISMAN to help you with your Qualified Domestic Relations Order or other order dividing a retirement asset?
The sooner the better. Ideally, the QDRO or similar order would be drafted, plan-approved (if possible), and ready to be entered by the Court no later than the date that the Final Judgment is entered. Additionally, to best protect a client’s interests, and to avoid malpractice claims, you should engage OLDER, LUNDY & WEISMAN to advise you on the appropriate language to use in your settlement agreement as to the division of a retirement asset. You may also want to speak with us in the event that a party is being non-compliant with a temporary relief or final order as to provisions relating to the payment of support and/or attorney’s fees. We are not simply a law firm selling a service, but rather we are a resource for attorneys and clients alike when dealing with retirement assets in family law cases.
To learn more about how we can help you in this area, please contact Matthew Lundy at 1-855-QDRO-LAW (1-855-737-6529).