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Can a QDRO assign benefits earned after divorce?


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Husband and Wife are divorced in 2009. They have a QDRO at that time that assigns Wife $7,000 of Husband's account. At the time of the divorce, Husband only had $10,000 in his account, so after Wife gets the $7,000, he's left with only $3,000 in his account. The issue is closed.

But, in the divorce decree, Husband is supposed to sell the marital house and give 1/2 the proceeds to Wife. He sells the house for $40,000 but doesn't give her any of the money. Wife files a contempt action and the Court rules that Husband is in contempt.

Since 2009, Husband has worked a ton of hours and his account balance has exploded. Wife files a new QDRO assigning Wife $20,000 of Husband's account. Keep in mind that just about all of that money was earned AFTER the marriage ended.

1) Is this permissible if Husband agrees to it?

2) Is this permissible if Husband does not agree to it?

Thanks.

You cannot bash in the head of an American citizen without written permission from the State Department.

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Can you have a valid QDRO if the husband doesn't agree with it? I mean at least to the point where he acknowldges the idea the court ordered it. I haven't thought that deeply about it because I am not sure I have ever seen a QDRO where both parties didnt' agree with it.

But in my mind "yes" they can agree to anything. In the end that is all a QDRO is -- an agreement to divide property in a qualifed plan. So if the husband and wife agree to it I would not have a problem with it.

I have clearly seen QDROs that give an alt payee a portion of the benefits earned before they are married. It happens because of things like your example. One person wants the house for example and the other person wants the funds for a secure retirement. So one agrees to take 100% of the house and the other agrees to take 100% of the retirement funds. It is all part of the deal making process.

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For qualification purposes, the plan should do whatever it is ordered, including assignment of benefits that accrue after divorce and benefits that accrue after a prior QDRO. Exception: the order cannot encroach upon the survivior benefit of a QJSA. No comment on what state law will allow. I have heard that courts are reluctant to revisit settlements, but I can't see why a court would care if it is not contested.

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1. If the plan is in receipt of a valid court order that assigns benefits and the order complies with the plan rules the plan must honor the QDRO.

2. The court (considering it family court to which law seems to rarely apply) can only assign benefits which are/were marital property.

3. If the account is a defined contribution account, any balance between the date of marriage and the cutoff date are marital property (presumably the entire $10,000)

4. Earnings and/or losses attributable to the marital portion are also marital property that can be assigned

5. Any contributions after the cutoff date (commencement date of the action) are the separate property of the spouse and cannot be assigned/awarded by the court.

6. A separate civil (non-family court) action, could find a judgment for the plaintiff, which could be satisfied by a levy against the account.

7. If the court awarded separate property, the court erred (which is common), then the account owner should appeal on the basis that the court awarded separate property.

If this is not a defined contribution account, accrued benefits after the marriage can be assigned to some extent (coverature formula).

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1. If the plan is in receipt of a valid court order that assigns benefits and the order complies with the plan rules the plan must honor the QDRO.

2. The court (considering it family court to which law seems to rarely apply) can only assign benefits which are/were marital property.

3. If the account is a defined contribution account, any balance between the date of marriage and the cutoff date are marital property (presumably the entire $10,000)

4. Earnings and/or losses attributable to the marital portion are also marital property that can be assigned

5. Any contributions after the cutoff date (commencement date of the action) are the separate property of the spouse and cannot be assigned/awarded by the court.

6. A separate civil (non-family court) action, could find a judgment for the plaintiff, which could be satisfied by a levy against the account.

7. If the court awarded separate property, the court erred (which is common), then the account owner should appeal on the basis that the court awarded separate property.

If this is not a defined contribution account, accrued benefits after the marriage can be assigned to some extent (coverature formula).

It has always been my understanding that QDROs are not restricted to spouses and the orders are not restricted to marital property. Proper QDROs can provide for diversion of some or all of the pension benefits from the participant to persons dependent on the participant (clearest example: children of the participant). Granted, division of separate property would fall outside the scope of a QDRO, which can only deal with the pension rights of the participant.

Always check with your actuary first!

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I can't speak to all jurisdictions, but in Ohio, 1) a court can issue a DRO without both parties agreeing to it's terms (it is, after all, an ORDER of the COURT), although typically it is an agreed upon order, it doesn't have to be (especially when the parties don't agree and the matter is resolved through trial); and 2) generally, the final decree "reserves" to the court continuing jurisdiction to enforce the terms of the settlement (or decision, in the case of a trial) - which implies just that - that the court can revisit the issue to enforce the provisions. of it's previous order/decree of divorce/dissolution. I don't believe it is relevant that the QDRO attaches post "divorce" assets accrued in the plan - as long as it is otherwise a valid DRO (under state law). Typically (in Ohio) as well, the DRO only applies to assets accrued during "coveture" (meaning the time they were together) and once they "separate," future accruals aren't (necessarily) factored into the split of marital assets. In the case at hand, it appears the court is simply looking to the balance to satisfy a different provision of the decree/agreement to split the proceeds of a house sale, and if valid under state law (and otherwise a "Q"DRO), it would be valid.

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