QDRO papers 6 years after divorce

[Guest fivepoint]

I was divorced in 2001, according to the divorce papers, the ex gets 1/2 of my 401K as of the date of our separation. Now, 6 years later, I receive QDRO papers, wanting me to sign the papers stating she gets 1/2 of my 401K as of the date of our separation and any gains or losses.

Up until a couple of weeks ago, I didn't even know about QDRO, I thought she would get what the divorce decree states. Neither attorneys brought it up during the divorce.

If the QDRO would have been done at the time of the divorce, how would it have read???? with or without the gain/loss statement. Would I have had a choice in how it read then.

And what about now, do I get a choice now? Can they really make the rules now after 6 years????

My 401K has changed hands, how would they even be able to figure out the gains/losses?

[Guest mjb]

You need to discuss your options with your attorney. One option would be to hire a financial consultant to review the changes in your account over the last 6 yrs and determine what portion of gains and losses would be allocated to your spouse but someone will have to pay for that. It is highly unlikely that your plan administrator will do this analysis because of the time and trouble involved. Many plan administators refuse to do retroactive calculations of gains/ loses. If you have your reports for the last 6 yrs ago you could try to do it yourself or just negotiate an amount with your spouse based upon an assumed interest rate from the date of divorce, e.g, 6%. Your attorney should check state law to see if the amount stipulated in the divorce is required to be adjusted if there is an unreasonable delay in preparing the QDRO.

[Mike Preston]

fivepoint sounds like somebody who is trying to take advantage of his ex-spouse. I have no sympathy for these sorts of people. fivepoint, if you had money in the hands of somebody else, and then you claimed it many years later, would you think it fair that any gains/losses attributable to those monies would rest with the person who held those monies? If you answer that you would expect to get the original amount, and no more (or less) then you are either being dishonest or are a bit on the naive side (I'm trying to be kind here).

Why wasn't this darn thing finalized? Could it be that your "interpretation" gave you a reason to delay (your first clue that your interpretation was off base)?

Sorry to come off without much empathy, but the fact is that this situation should be decided on the basis of fairness. If, as mjb implies, there is some mechanism that would allow you to escape with all of the gains, then I suppose you are entitled to it. But I wouldn't be able to sleep at night.

[Guest mjb]

Mike: I dont think your comments have any basis in the facts as described in the OP and should refrain from taking sides. Its not clear what the reason for the delay is. I have seen dros that were more than 5 yrs old still being revised by the parties to conform to plan adm objections. Sometimes people have more important priorites than submitting a DRO for approval.

[jpod]

fivepoint: Look on the bright side: maybe you lost money over the past six years! Just kidding.

Point 1: There is nothing in the Federal QDRO laws that would prevent a DRO from being drafted at this late juncture that qualifies as a QDRO.

Point 2: I agree you should consult with a lawyer, because whether the DRO can now seek gains/losses would be a question of applicable state law. Without knowing anything more, I think your lawyer might be justified in feeling a bit "sheepish" about arguing to a judge that the ex-spouse should not share in gains since the separation date, if there were gains. Perhaps I would be wrong if there was evidence that the ex-spouse and the ex-spouse's lawyer were solely at fault for the delay, but I'm merely speculating on that point.

[Mike Preston]

mjb, you are kidding, right? This isn't an engagement where somebody has hired me to be impartial, or to advocate. This is a public bulletin board where it is not at all inappropriate to "take sides" as in "have opinions." All I can say is that if you really can't see it, then you are intentionally covering your eyes.

[Guest mjb]

I dont have a problem with you opinion. Its the abusive way you aimed it at the OP (who had no idea of the QDRO rules that we are familar with) without having any confirming facts.

[Guest fivepoint]

fivepoint: Look on the bright side: maybe you lost money over the past six years! Just kidding.

Point 1: There is nothing in the Federal QDRO laws that would prevent a DRO from being drafted at this late juncture that qualifies as a QDRO.

Point 2: I agree you should consult with a lawyer, because whether the DRO can now seek gains/losses would be a question of applicable state law. Without knowing anything more, I think your lawyer might be justified in feeling a bit "sheepish" about arguing to a judge that the ex-spouse should not share in gains since the separation date, if there were gains. Perhaps I would be wrong if there was evidence that the ex-spouse and the ex-spouse's lawyer were solely at fault for the delay, but I'm merely speculating on that point.

Actually, they are the reason why it has taken this long. This is the first and only time I received the QDRO papers....6 years later....

Anyway, thanks for your input.

[Guest fivepoint]

fivepoint sounds like somebody who is trying to take advantage of his ex-spouse. I have no sympathy for these sorts of people. fivepoint, if you had money in the hands of somebody else, and then you claimed it many years later, would you think it fair that any gains/losses attributable to those monies would rest with the person who held those monies? If you answer that you would expect to get the original amount, and no more (or less) then you are either being dishonest or are a bit on the naive side (I'm trying to be kind here).

Why wasn't this darn thing finalized? Could it be that your "interpretation" gave you a reason to delay (your first clue that your interpretation was off base)?

Sorry to come off without much empathy, but the fact is that this situation should be decided on the basis of fairness. If, as mjb implies, there is some mechanism that would allow you to escape with all of the gains, then I suppose you are entitled to it. But I wouldn't be able to sleep at night.

As I mentioned, I did not know what QDRO papers where...until 2 weeks ago...it was never finalized, because I just got papers. My ex and her lawyer are the ones that delayed getting this finalized. I was only looking for guidance as to whether or not they were trying to get me to sign something that I didn't even know I needed to sign, especially since they already did the DRO on my pension a long time ago...why didn't they do my 401K at the same time....

[Guest fivepoint]

You need to discuss your options with your attorney. One option would be to hire a financial consultant to review the changes in your account over the last 6 yrs and determine what portion of gains and losses would be allocated to your spouse but someone will have to pay for that. It is highly unlikely that your plan administrator will do this analysis because of the time and trouble involved. Many plan administators refuse to do retroactive calculations of gains/ loses. If you have your reports for the last 6 yrs ago you could try to do it yourself or just negotiate an amount with your spouse based upon an assumed interest rate from the date of divorce, e.g, 6%. Your attorney should check state law to see if the amount stipulated in the divorce is required to be adjusted if there is an unreasonable delay in preparing the QDRO.

Thank you. This is very helpful. I can't imagine the plan administrator going back 6 years either...especially, since it changed hands a couple of years ago. So, if they don't do retroactive calculations, then how do they do it... I guess, I'll find out soon... Thanks again!

[Mike Preston]

Still don't buy it, sorry. Something doesn't ring true when the DRO for the pension was done a long time ago and now the DRO for the 401(k) is somehow not understood. At all? Come on.

Nonetheless, I'll bite on the OP's statement that the delay is caused exclusively by the ex-spouse and/or her lawyer. There is a marital dissolution document of some sort, that defines what the OP said his ex-spouse is entitled to and that is 1/2 the value of his 401(k) as of a certain date. It appears to be silent on the issue of what happens with respect to the passage of time and the changing value of that account. [Please double check that.] Let's presume that his ex- and her attorney will state that either the marital dissolution document is clear or, in the absence of it being clear, that state law is clear on the fact that the OP's ex-spouse is entitled to gains/losses since then. Note that this is a two-edged sword. If the account is, in the overall, less valuable today than it was on the date previously described, it is the OP that will want to see this interpretation, not the ex. But, for now, let's assume the value is "up", we just don't know how high "up" is.

Your ex- and her lawywer, will no doubt submit a DRO to the your plan asking the plan to determine the value of the account as of that date and then to "trace" the gains/losses associated with those funds through to today. Your plan will either respond with "OK, here is the value you asked for." Or, they will respond with: "we don't do that sort of calculation."

Let's assume it is the latter, because there isn't much controversy if it is the former.

Now it becomes an interesting issue for a judge to decide if you and your ex- can't work it out. You might have the records (or be able to get them from your plan), but not be volunteering them. Or, they may not exist. Maybe your ex- has somehow been given statements every quarter and actually has the information herself from which to prepare an analysis. Whatever. If you volunteer to work with them (with or without counsel - and I'd suggest counsel of course) and come to an agreement, then it ends there and the DRO is drafted consistent with what you agree. If you can't come to an agreement, then your ex- can attempt to get a judge to agree with her version of what is fair. If the judge agrees, then again, a DRO is drafted which incorporates that agreement.

Whether it is best for you to actively participate in determining the calculation or to let them try and put it together without your help is something that only competent counsel can guide you about.

While I don't see it happening, if the judge decides that the lack of information is caused by your ex-'s delay and that therefore she shouldn't get a share of the gains/losses since that date, then that is what the DRO ends up saying.

And, to round out the discussion, if there is state law where you are which says that she is not entitled to gains/losses because the marital dissolution agreement is silent on the issue then you should have a right to reject the DRO that you've been asked to sign. Only competent counsel can guide you there.

Good luck and let us know what happens.

[Mike Preston]

mjb, I think my record on BenefitsLink speaks for itself. You will find many more messages from me to those involved in divorce which are empathetic than those which are not. Have I turned into a curmudgeon suddenly? Hardly. Are YOU sticking to your side of things in the face of the "new facts" that there previously was a pension DRO?

I guess time will tell.