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Ask Lawrence D. Gorin Your Own Question

Lawrence D. Gorin
Lawrence D. Gorin, Family Law Attorney
Category: Family Law
Satisfied Customers: 1505
Experience:  30+ years family law experience. QDROs, UIFSA, UCCJEA expertise.
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Divorced in 1997. A 4 way agreement did not go before the

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Divorced in 1997. A 4 way agreement: did not go before the Judge as I wanted all to be done at that time. An agreement (QDRO) was listed with a specified amount which I thought would be done then, also. After I signed, I was informed verbally that I had to wait until my ex was 59-1/2 years old. It was a tax deferred savings thru my ex-husband's employer. The lawyer I had was not able to get the wording correct; I have the correspondence from both sides. I called around locally, borrowed funds from a relative and obtained another lawyer to handle it. All I have from that lawyer are the receipts that I paid him $1,000.00 for a QDRO. He told me it would take a while. The last time I called to follow up, the lawyer was no longer practicing and the person I spoke to had no record of a QDRO on my behalf. I want to know what is the 'statue of limitation' regarding this AND is it from the divorce date OR from the date he turned 59-1/2 years old, which was 5/8/09. Thank you for any assistance.
Submitted: 3 years ago.
Category: Family Law
Expert:  Lawrence D. Gorin replied 3 years ago.

NEED MORE INFO......

Sounds like what is involved here in an employer-sponsored tax deferred retirement savings plan. I presume this was a 401(k) plan. Is that correct?

 

Also, was the "specified amount" of your court-awarded share of the retirement interest expressed in terms of a specific DOLLAR AMOUNT? Or is it stated in terms of a specific PERCENTAGE?

 

Also, in either case, does the language of the divorce judgment specify a division date for division of the retirement plan? For example: "Wife is awarded 50% of husband's vested interest in the ABC Widget Corp. 401(k) Retirement Savings Plan as of June 30, 2009." ? Or "Wife is awarded $10,000 as of the date of this judgment." ?? Or words of similar effect.


Frankly, it would be most helpful in analyzing your problem and providing an answer if you would simply provide me with the exact and specific wording of the provision of the divorce judgment that pertains to the division of the retirement interest. The whole paragraph --- word for word. Just retype it in you reply to this information request.

LDG


PS: Unfortunately, it sounds like the lawyers from whom you have sought help did not know anything about QDROs. Adding insult to injury is that many otherwise fine family law lawyers THINK they know how to deal with division of retirement interests incident to divorce but really do not. And it ends up being the poor client who sustains the damage from the lawyer's ignorance I see this happening all that time. But from the facts you have presented so far, your case appears to be "fixable." We just need further information in order to be able to figure out the right "fix."

 

Customer: replied 3 years ago.
The wording is - A portion of Respondent's "County of Los Angeles Horizons: The Deferred Compensation and Thrift Plan" in the total gross sum of $ ; Counsel for Petitioner shall prepare a "QDRO" and/or any other document(s) necessary (other than this judgement) by which to transfer said portion of same to Petitioner.
Expert:  Lawrence D. Gorin replied 3 years ago.
YOUR ORIGINAL QUESTION:
I want to know what is the 'statue of limitation' regarding this AND is it from the divorce date OR from the date he turned 59-1/2 years old, which was 5/8/09?

Your Information:
The wording is - "A portion of Respondent's "County of Los Angeles Horizons: The Deferred Compensation and Thrift Plan" in the total gross sum of $_____ ; Counsel for Petitioner shall prepare a "QDRO" and/or any other document(s) necessary (other than this judgment) by which to transfer said portion of same to Petitioner."

ANSWER:
OK. Now I have a better understanding of what is involved.

The Horizons Plan is a voluntary supplemental retirement program intended to satisfy the requirements of an “eligible deferred compensation plan” under Section 457 of the Internal Revenue Code (commonly called a "457 deferred comp" plan). Similar to a 401(k) plan, but 457 plans are used for state and local governments and tax-exempt organizations.

Plan participants may elect to defer receipt of a portion of their current monthly "Includible Compensation" and contribute that portion to the Plan. The County also makes matching contributions to the Plan on the participant's behalf. Deferrals, matching contributions and any earnings that accumulate in participant's account are not taxed until they are distributed (paid out).

The the technical County Code name for the Horizons Plan is the "County of Los Angeles Deferred Compensation and Thrift Plan." CLICK HERE the Summary Plan Description.

Under California law, the portion of your ex-husband's interest in the Plan that was acquired during your years of marriage is considered as community property, and you would normally be entitled to 50% (one-half) of the "community property" (or "marital") portion, with the exact dollar amount to be determined when distribution is made to you. Sometimes, but not usually, the portion awarded to the spouse is stated in terms of a specific dollar amount, rather than in terms of a percentage (such as "50%"). A specified dollar amount may not be as advantageous to the spouse in contrast to a percentage award. But the 1997 divorce judgment in your case is controlling, and lays the foundation for what you are entitled to receive.

The divorce judgment declares the division and makes the actual award -- in this case awarding your a specified and fixed dollar sum. The award as made by the terms of the divorce judgment are then implemented by a supplement judgment -- generally referred to as "QDRO," meaning a "Qualified Domestic Relations Order" -- which is a separate court order that authorizes and directs the plan administrator to take the court-awarded portion of the plan participant's account balance (or benefit entitlement) and pay it over to the participant's former spouse (referred to as the "alternate payee").

There is no statute of limitations on preparing the QDRO, getting it signed by the judge, and then submitting it to the plan administrator. Upon receipt by the plan administrator of a court-certified copy of the order, the plan administrator will then determine whether the court order complies ("qualifies") with the applicable federal law requirements, as well as with the terms and provisions of the plan itself, and, if it so qualifies, the plan administrator will then be legally obligated to comply with the terms of the order.

Since it is the divorce judgment (and not the QDRO) that declares and makes the substantive award, the particular language used in the divorce judgment is critically important, as it will control how much the alternate payee receives (or, in your case, does not receive). There are a number of various methods the can be used in making the division of a retirement interest incident to divorce. They do not all produce the same result. Some are more favorable to one spouse and less favorable to the other. This is way it is so important that lawyers handling a divorce that involves a retirement plan know what is involved take appropriate action to protect the financial interest of the lawyer's client by demanding the use of divorce judgment language that will be most beneficial for the client. Unfortunately, that did not occur in your case.

Your divorce judgment simply awards you a fixed and specified dollar amount of husband's 457 retirement account balance, without making any provision for interest to be added to that amount from time of divorce until the time of distribution. The language the of the QDRO in this circumstance will typically say:

"This Order, pertaining to the participant's entitlement in and to benefits from the County of Los Angeles Deferred Compensation and Thrift Plan, hereby assigns to the Alternate Payee as her sole and separate property the amount of $_____________. This fixed amount is not subject to any accruals or losses prior to the date of division. The date of division shall be as soon as administratively feasible following the date this Order is approved as a QDRO by the Plan, signed by all parties and the Court and delivered to the Plan Administrator. Thereafter, Alternate Payee’s account(s), if applicable, shall be subject to accruals, losses, investment options, and distribution as set forth in the Plan and this Order."

This could and should have been done immediately after the 1997 divorce. No need for defer action until husband retires (or attains age 59-1/2). You would have had the option of directing the plan administrator to immediately "roll-over" your court-awarded share to an IRA account that you would have set up in your own name. This was most likely not done in your case (as it true of thousands of others) because the lawyers involved did not know how to properly deal with the division of retirement interests incident to divorce. In particular, to the extent that the retirement interest is not awarded to your, it remains your husbands. Sloppy legal work in dealing with the division of retirement interests incident to divorce generally results in the non-employee spouse (usually wife) not getting much as she would have otherwise been entitled to receive.

But is is not too late to get the QDRO now done and processed.

CLICK HERE for a model form QDRO for the County of Los Angeles Deferred Compensation and Thrift Plan.

For general information about QDROs from the U.S. Dept. of Labor, check the following websites:
http://www.dol.gov/ebsa/publications/qdros.html

http://www.dol.gov/ebsa/Publications/qdros_appD.html

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Edited by Maria-moderator on 10/12/2010 at 6:16 PM EST
Lawrence D. Gorin, Family Law Attorney
Category: Family Law
Satisfied Customers: 1505
Experience: 30+ years family law experience. QDROs, UIFSA, UCCJEA expertise.
Lawrence D. Gorin and 4 other Family Law Specialists are ready to help you
Customer: replied 3 years ago.
Lawrence D. Gorin, (Esq., is that correct?) Thank you so much for ALL the information you have provided. I will check with 2 retired judges here in town as to whom they would recommend to handle the QDRO paperwork and I will go for a consultation, if nothing else. I haven't seen my ex-husband in over 13 years and I think he may be retired. I don't know that I would pursue further if he has already cleaned out the fund. My blood pressure rises just thinking on it. The amount is not huge, but substantial. If I am able to obtain these funds, I will surely send you a gratuity; I am not able to do it at this time. Please email me with information to get ahold of you in future, as this may take a while.

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