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Madison71
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JPOD: go back and look at my earlier posts.  You may be surprised, but there are significant circuit court decisions that have done just that (I noted the ones that had done so as of the date of that reference, which is a few years old now). It can be a big mess, and my guess is more circuits over time will go with the ones that found that the equities argue for giving the post death order validity, at least at some degree.  

Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC
President
Qualified Plan Consultants, Inc.
46 Daggett Drive
West Springfield, MA 01089
413-736-2066
larrystarr@qpc-inc.com

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3 minutes ago, jpod said:

QDRO, I agree with everything you've said.  However, I believe Madison has stated that to this day not even a mere DRO has been provided to the plan, and now it's long past the participant's death.  Given these facts/timing, I would be surprised if the law permit a post-death purported QDRO to be effective, but as I said in my one and only entry here I have not done the research.  But on the other hand, if the surviving spouse has already made a viable claim for her benefits, and if the plan has not received a DRO, how can the plan deny her claim? 

I don't think we were given the facts that this happened "long ago", just that the divorce was a couple of years back and that the plan did not receive a QDRO at the time. Either way, the death of a participant would not make a subsequent order fail to be qualified.  

Quote

29 CFR 2530.206(c)(2)(1) 

Orders issued after death. Participant and Spouse divorce, and the administrator of Participant's plan receives a domestic relations order, but the administrator finds the order deficient and determines that it is not a QDRO. Shortly thereafter, Participant dies while actively employed. A second domestic relations order correcting the defects in the first order is subsequently submitted to the plan. The second order does not fail to be treated as a QDRO solely because it is issued after the death of the Participant. The result would be the same even if no order had been issued before the Participant's death, in other words, the order issued after death were the only order.

The facts are slightly different but the end result is the same

 

 

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The end result is not the same in my view.  In our case there has been no DRO presented to the plan.  Surviving spouse has made a claim for benefits.  What is the legal basis for denying her claim?     

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2 minutes ago, jpod said:

The end result is not the same in my view.  In our case there has been no DRO presented to the plan.  Surviving spouse has made a claim for benefits.  What is the legal basis for denying her claim?     

Without a QDRO? They have none, unless they have one of those funky QDRO procedures that kicks in when they are put on notice, but Im pretty sure OP said they require the actual QDRO.  My point was simply that the death of the participant does not invalidate a subsequent QDRO, which had previously been called into question in this thread.

 

 

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  • I am talking about the surviving spouse, who has made a claim.  If her claim is honored, a subsequent DRO served on the plan will be a waste of time because the account balance at that point is $0.  
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We have all been speculating about what the plan has received relating to the divorce, and have been discussing the effects contingent on timing.  If the plan has received nothing and does not have procedures that get into the DOL's  bizzaro world of notice about an intended QDRO, then a claim by the surviving spouse can be processed and paid, leaving nothing for a late-delivered domestic relations order to operate on and legal malpractice as a potential source of consolation to the former spouse.  But what happens when an order appears during the process and before the actual 100 percent distribution?  And despite my confidence about the law and contempt for the DOL, it is uncomfortable for the fiduciary to stand by with information about a legitimate claim missing the boat as the fiduciary decides how fast to proceed with distribution.  The practical, but controversial, solution based on a desire for the right outcome, is for the fiduciary to say, "send me the divorce decree, now" (improperly stepping into the role of legal adviser to the former spouse).  ERISA is firmly based in equity, after all.

Or, if you are a no-nonsense fiduciary, you have no sympathy for those who sit on their rights, and Equity will agree, at least at some point.  And I would not gainsay.

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I just don't see how the former spouse would have standing to sue the plan or its fiduciaries, much less a viable claim, if the surviving spouse is paid out before the plan receives a DRO, let alone a DRO that is a QDRO.  Former spouse has a malpractice claim against her attorney and, possibly, some kind of equitable claim against the surviving spouse.      

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3 hours ago, jpod said:
  • I am talking about the surviving spouse, who has made a claim.  If her claim is honored, a subsequent DRO served on the plan will be a waste of time because the account balance at that point is $0.  

Sure, if we change the facts from post death QDRO being the issue (its not) to a post-distribution QDRO, the issue is moot. 

 

2 hours ago, jpod said:

I just don't see how the former spouse would have standing to sue the plan or its fiduciaries, much less a viable claim, if the surviving spouse is paid out before the plan receives a DRO, let alone a DRO that is a QDRO.  Former spouse has a malpractice claim against her attorney and, possibly, some kind of equitable claim against the surviving spouse.      

Ex-spouse would have standing if the plan ignored a valid and timely QDRO, like a QDRO filed before assets were distributed.  Ex-spouse would absolutely have an equitable claim against surviving spouse for assets that the court already ruled belongs to ex-spouse. 

 

 

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