Law Tips: 10 Hot Tips on QDRO’s

When in doubt, ask for certified copies of the judge-signed QDRO to send to the Plan Administrator. After an agreement is signed by the judge is not the time to discover you cannot divide the account per the terms of the agreement. Are these scenarios familiar? What are your red flag issues in preparing QDROs? How do you keep everything running smoothly with the Plan Administrator? This week I’m very pleased to offer our Law Tips readers Family Law input from Lana Pendoski, Newton, Becker, Bouwkamp and Pendoski, Indianapolis. Thanks to Lana for allowing me to share her Ten Hot Tips on QDROs:

1. Know Your Type of Plan. Either a defined contribution plan or a defined benefit plan.

2. Can It Even Be Divided? You do not need a QDRO for an IRA or SEP. Also determine if the retirement account is made up of multiple parts. Part of the account might not be divisible.

3. Research. Well before settlement negotiations, mediation or final hearing, call the Plan Administrator and ask for forms and a QDRO procedures/guidelines packet. Know the requirements of the Plan Administrator for all steps of the QDRO process. Most plan administrators will have form or sample language. Some Plan Administrators require you to use on-line forms. After an agreement is signed by the judge is not the time to discover you cannot divide the account per the terms of the agreement.

4. Drafting. State in the agreement the party (or attorney) responsible for drafting the QDRO. State a time for the first draft of the QDRO to be completed. Include language in the Decree that the Court has continuing jurisdiction over the case to enter or modify the QDRO. Ensure both counsel have an opportunity to review the draft QDRO before it is submitted to the Court or Plan Administrator.

5. Cost. Some Plan Administrators charge a fee for reviewing a proposed QDRO, or they charge a fee if they have to review the QDRO more than once. State in your Agreement how the expense associated with qualifying the QDRO will be paid. If you do not state specifically, some Plan Administrators default to an equal division of the cost.

6. Deadline. If you are responsible for drafting the agreement, implement some diary or calendar system to remind you to complete the document. If you aren’t responsible for drafting and your client is receiving  funds, diary it for follow up and then contact the opposing counsel.

7. Watch Your Language. Carefully, carefully read the language of the Decree and ensure the language you use correctly reflects what was intended by the agreement. Things like a sum certain or a percentage of the account, and valuation dates are important. Also, language such as sharing in the increase and decrease in the value are important. Once the account is segregated for the Alternate Payee the account may fluctuate with the market. Do not provide benefits to the Alternate Payee not otherwise available under the plan- another reason to secure form or sample language. Along the same lines, confirm the value of the account immediately prior to reaching an agreement.

8. Reviewing. Carefully review a QDRO drafted by another attorney. Watch for language regarding the award to the Alternate Payee, division of any costs, and which party will submit the QDRO to the Plan Administrator. Specify in the Decree the drafting party will also submit the QDRO to the Plan Administrator.

9. Pre-Qualified. Submit the QDRO to the Plan Administrator to pre-qualify before having the judge sign the QDRO, if possible. Another reason to contact the Plan Administrator well in advance is to determine pre-qualification procedures and costs.

10. Certified. Determine if the Plan Administrator will require a certified copy of the signed QDRO. When in doubt, ask for certified copies of the judge-signed QDRO to send to the Plan Administrator.

That concludes our QDRO pointers from Lana Pendoski. If you have your own tip(s) to add to the list, please feel free to leave a comment below. I appreciate Lana’s continuing contribution to our ICLEF community. Ms. Pendoski’s CLE presentation is a part of the 2012 Family Law Institute which is available On Demand through our website, Click Here. If you are interested in the 2013 11th Annual Family Law Institute, Click Here.

______________________________________________________________________

About our Law Tips faculty contributor:
Lana Pendoski, Newton, Becker, Bouwkamp, Pendoski, Indianapolis, concentrates her practice in Family Law, Litigation and Estate Planning.  She is also a Family Law Mediator. Ms. Pendoski received her JD from Valparaiso University School of Law in 1998 and is admitted to the Bar in both Indiana and Tennessee.  She is a member of the Professional Advisory Committee of Buchanan Pastoral Counseling, Indianapolis  and a member of the Board of Directors of the Indiana State Wrestling Association.

About our Law Tips blogger:
Nancy Hurley, Law Tips blogger, has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.

Thank you for reading Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page. Also, you are encouraged to comment below or email Nancy. She welcomes your input as she continues to sift through the treasure trove of knowledge of our CLE faculty to share with you on Law Tips.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Leave a Reply