Unsigned DRO Alternate Payee died

[PFranckowiak]

We have an Unsigned DRO that was presented to make sure the plan name was correct before it was submitted to the judge for signature. The Alternate Payee died before it was signed by the judge. 401(k) Plan. Divorce was final in May 12th. They were in the process of submitting to the court, not sure if it is at the court waiting for signature. Any thoughts?

Pat

[masteff]

Your search term is: posthumous qdro

You'll find a few results on here which might shed some light.

You might find the reg (especially the preamble) discussed in this article: http://www.seethebenefits.com/showarticle.aspx?Show=3458 See the 7th paragraph (starts with "Would...").

I think an initial question is who would the beneficiary be absent the DRO. If it's the same person, then you have the best case scenario. My perspective is that most case law on the topic exists because someone else thought they were entitled to the benefit (new spouse, children, etc). So it raises the following questions: Is someone other than the ex-spouse designated? Did the participant get remarried? Does the plan specify that designations naming the spouse expire upon divorce?

[QDROphile]

Wait to see if the plan receives a domestic relations order. Evaluate the order received, if any. Bemoan the fact that the Deprtment of Labor was completely unhelpful in response to the mandate from Congress to provide guidance about the effect of death before a domestic relation order is determined to be qualified.

[casey72]

A related question - Any thoughts on what should happen if the **alternate payee** dies a few days before the order is formally entered by the court? Assuming that the plan was on notice of the pending DRO before the AP's death?  The DOL regulations and case law on point largely deal with the participant's death before the order is entered or qualified.  

[My 2 cents]

Not a lawyer, don't get involved in the pre-plan-review phase of QDROs.  First question is what happens to the divorce process itself?  If the death does not make the divorce process moot, I would certainly leave the headache concerning what to do about the QDRO to the court to figure out.

Would the fact that the alternate payee died before the plan's acceptance of the order as a QDRO be sufficient grounds for rejecting the order (especially if it did not explicitly recast the method to be followed for satisfying the order, given that the alternate payee had died)?

All this is predicated (of course) on the participant not having been complicit in the alternate payee's death!

[david rigby]

I'm unsure that "divorce" is related in any way to the question of a DRO.  In many cases, there is a property settlement (or similar term) that precedes a divorce.

 

[My 2 cents]

What happens to the property settlement if one member of the couple dies before the settlement is formalized?

[MoJo]

14 hours ago, My 2 cents said:

What happens to the property settlement if one member of the couple dies before the settlement is formalized?

Interesting topic - and one that depends on State law.  Where I've practiced, the Separation Agreement is COMPLETELY revocable up until the Court orders the divorce/dissolution.  Indeed, the Judge or Magistrate is REQUIRED to ask the parties if they have read the Agreement, if they have any questions about the Agreement (or have they discussed it with their attorney), did they sign it voluntarily and without coercion, and if they still agree to the terms of the Agreement "today."  If so, the Court will enter the decree of divorce - which at that time fixes the property rights of the parties.  If the Agreement calls for a DRO, and one party dies AFTER the decree of divorce but before the DRO is issued, it will still be issued, and the estate of the deceased steps into the shoes of the decedent.

If the party dies BEFORE the divorce decree is issued, the Separation Agreement (unless already part of an order of the Court - as in a "legal separation" proceeding) is OF NO EFFECT WHATSOEVER (they haven't "verified" it as discussed above), and the parties are still "married" at time of death.  Go to probate court....