Marital Property rights under QDRO

[Eric Hanford]

What is the IRS Code that states QDRO's can be used for Alimony, Child Support or Marital Property in general?

[david rigby]

IRC 414(p) defines QDROs.  You should read the definition in subsection (p)(1).

 

[Peter Gulia]

And ERISA § 206(d)(3) [compiled as 29 U.S.C. § 1056(d)(3)] includes a command that a retirement plan (if governed by part 2 of subtitle B of title I of the Employee Retirement Income Security Act of 1974) must provide for paying benefits according to a qualified domestic relations order.

https://uscode.house.gov/view.xhtml?req=(title:29%20section:1056%20edition:prelim)%20OR%20(granuleid:USC-prelim-title29-section1056)&f=treesort&edition=prelim&num=0&jumpTo=true

[justanotheradmin]

The property agreement - however it is decided either by court order, or agreement of the parties - is what it is. 

If the property agreement awards part of a retirement benefit to someone other than the participant - then the QDRO is simply the means to get that awarded. Why the retirement is split, or awarded one way or the other - doesn't really matter to the plan. Maybe spouse A wanted to keep the house, and agreed that spouse B could have all their retirement accounts. Maybe it was all hashed out in mediation or court and it was decided that everything has to be split directly in half.  Maybe one person didn't want to give up anything and the court has to specify who gets what. There are a million different circumstances. 

 

For example If the property agreement says the Lexus goes to Spouse A, but its Spouse B that is on the title, registration, etc, there are specific forms that have to be filled out for the actual ownership of the Lexus to get changed. If Spouse B doesn't cooperate and doesn't sign whatever forms are needed, then Spouse A has to go back to court and get additional items so they can get the title to the car updated without the other person's signatures. The QDRO is the mechanism like the forms for the car title change, but for the retirement plan benefits. 

Sometimes the parties will agree to more up front in lieu of on-going alimony, and if they also agree(or the court decides) that it will be paid via giving one person part of the retirement benefit, then once that agreement (property agreement) is in place, a QDRO is usually started.

This is completely different than someone owing alimony after the fact, and one person is trying to come up with money to pay it, and they want to know if they can take money out of their retirement account to pay to the other person. 

 

[Eric Hanford]

27 minutes ago, justanotheradmin said:

The property agreement - however it is decided either by court order, or agreement of the parties - is what it is. 

If the property agreement awards part of a retirement benefit to someone other than the participant - then the QDRO is simply the means to get that awarded. Why the retirement is split, or awarded one way or the other - doesn't really matter to the plan. Maybe spouse A wanted to keep the house, and agreed that spouse B could have all their retirement accounts. Maybe it was all hashed out in mediation or court and it was decided that everything has to be split directly in half.  Maybe one person didn't want to give up anything and the court has to specify who gets what. There are a million different circumstances. 

 

For example If the property agreement says the Lexus goes to Spouse A, but its Spouse B that is on the title, registration, etc, there are specific forms that have to be filled out for the actual ownership of the Lexus to get changed. If Spouse B doesn't cooperate and doesn't sign whatever forms are needed, then Spouse A has to go back to court and get additional items so they can get the title to the car updated without the other person's signatures. The QDRO is the mechanism like the forms for the car title change, but for the retirement plan benefits. 

Sometimes the parties will agree to more up front in lieu of on-going alimony, and if they also agree(or the court decides) that it will be paid via giving one person part of the retirement benefit, then once that agreement (property agreement) is in place, a QDRO is usually started.

This is completely different than someone owing alimony after the fact, and one person is trying to come up with money to pay it, and they want to know if they can take money out of their retirement account to pay to the other person. 

 

But money can be taken out of a Retirement account for Alimony?

[justanotheradmin]

3 minutes ago, Eric Hanford said:

But money can be taken out of a Retirement account for Alimony?

your question isn't specific enough. 

Can a participant take money out of their account and use it to pay alimony?  - the participant can take money out of their account if their plan allows it. Usually things like hardship, termination of employment, reaching a specific age. once the participant takes the money out - (they pay tax and penalty, if applicable) what they actually do with the money is up to them. If they use it to pay alimony, that's on them. 

Does your employer offer a retirement plan? If yes, do they have a service provider you can ask these types of questions? they might be able to help explain these things. understanding your own plan rules will help you understand what might be possible for other plans. 

[Eric Hanford]

4 minutes ago, justanotheradmin said:

your question isn't specific enough. 

Can a participant take money out of their account and use it to pay alimony?  - the participant can take money out of their account if their plan allows it. Usually things like hardship, termination of employment, reaching a specific age. once the participant takes the money out - (they pay tax and penalty, if applicable) what they actually do with the money is up to them. If they use it to pay alimony, that's on them. 

Does your employer offer a retirement plan? If yes, do they have a service provider you can ask these types of questions? they might be able to help explain these things. understanding your own plan rules will help you understand what might be possible for other plans. 

Can a QDRO be used to pay delinquent Alimony and/or Child Support? 

[Peter Gulia]

If you click on the hyperlink above to read the statute, you’ll see that a domestic relation order (a subset of the defined term qualified domestic relation order) may “relate[] to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant[.]”

But a lawyer drafting an order one hopes the retirement plan’s administrator will decide is a QDRO should read carefully the plan’s governing documents so that the order one proposes to a domestic-relations court meets all conditions of ERISA § 206(d)(3), including that the order “does not require a plan to provide any type or form of benefit, or any option, not otherwise provided under the plan[.]”

For one example, an order that purports to direct an ERISA-governed individual-account (defined-contribution) retirement plan to pay an alternate payee an amount each month would not be a QDRO if the plan does not provide periodic payments.

If a might-be alternate payee’s lawyer, paralegal, limited license legal technician, or other adviser lacks expertise about QDROs, that person might engage help from a lawyer or other practitioner who has the needed knowledge and skills.

[fmsinc]

Consult a competent lawyer in your state who knows how these things work.  Pay that lawyer for his/her services.  You will never figure it out.  You have never stated whether or not you are talking about a judgment for alimony arrears or an ongoing alimony  obligation.  You have never said if you are talking about a defined contribution plan, or a defined benefit plan (that is or is not in pay status). 

You have never asked a question that could be answered because you don't understand this most complicated area of the law.  You have never identified which of the 175,000 pension and retirement plants in the US that you are dealing with. They don't all work the same way. 

You have never even said whether you are the participant or the alternate payee.  Or are you the attorney for one of the parties.  If that's the case make sure your malpractice insurance is up to date and think about another career when you are disbarred. 

Would you expect a neurosurgeon to perform brain surgery without looking at the patient's MRI?  There is not a single answer that has ever been posted to any questions you have asked in your multiple post that will help you with whatever it you you are trying to do.  You simply don't know what you don't know and you don't appreciate how a delay in resolving whatever is going on in your case can have enormous financial consequences. See the attached Memo.  

CONSEQUENCES OF DELAY 04-15-24.pdf