QDRO's came into play sometime after 1983 with the ruling of Berry v. Berry, 647 SW2d 945 (Tex. 1983). This case addressed the issue of determining one spouse's interest in and to the other spouse's retirement benefits which were accrued during the marriage of the parties. The court held that Ms. Berry was entitled to one-half of Mr. Berry's retirement benefits earned during the marriage, even though he was not eligible to retire at the time of the divorce. After that determination, the federal government got into the picture and statutes were passed to implement QDRO's. That was the beginning of a lot of frustration for legal assistants and attorneys.
Those of us working in family law are familiar with the complexity of preparing a QDRO. Every company is different, and what is termed "qualified" today may not be qualified tomorrow. As a general rule, it is usually your client who is the spouse entitled to a portion of the other spouse's retirement benefits and the client believes that he/she deserves the benefit simply for staying married to the spouse. It is your job to see that they receive all of the benefits (investments) to which they are entitled. Not only should you start preparing inventories and discovery in a divorce case right away, but you should immediately begin gathering information on the spouse's company's required language for QDROs. This means contacting the Plan Administrator for the specific company issuing the Plan (plans) and requesting information on its requirements. It is never just as simple as making a telephone call. Sometimes it takes several phone calls before you locate someone who can provide you with the information you need. Usually an employee is enrolled in more than one plan so you may have to research the requirements for several plans during this process. You may have retirement plans, pension plans, 401Ks, incentive savings plans, and other deferred compensation packages available to the employee. Once you have gathered all of the pertinent information, a quiet reading room might be helpful. It is not nearly as much fun as a Sandra Brown novel, but you will "absorb" more.
Some of the "easy" required information you must gather are the name of the payee, alternate payee, addresses, dates of birth, social security numbers, date of marraige, date employee was vested in the plan(s), length of time the parties were married, election of survivor benefits or distribution of the plan (or both), including how much, how long, and how paid. Sound like a challenge? The challenge is in getting the QDRO qualified.
It's usually not possible to have QDRO's pre-approved. The administrators of the plans will not submit a rough draft to their legal departments for approval. They want the finished product. And don't hold your breath waiting for word to come that you are home free - it passed. It rarely ever happens the first time. Not only that, but you may get a letter four or five years later saying "your order is no longer qualified."
Here are some examples of QDRO's that have been returned:
One QDRO was returned after an extended period of time (almost four years) for re-drafting because the name of the plan changed. The client in this case was an elderly gentlemen who was in the hospital dying of a terminal illness and I had to re-type the order and have it taken to his hospital room for approval and signature. Sounds cruel and uncaring doesn't it? Well, he and his ex-wife had been married for over twenty years and she was entitled to the benefits acquired through his employment during the marriage. She would not have been eligible for the benefits if the QDRO was not re-done. Also, most courts require a motion and order nunc pro tunc. JUST WHAT YOU NEED -MORE WORK!
In another example, a company required a QDRO in a divorce that was granted in the late '70s-before QDRO's even existed. That may not even be possible within the rules.
Alternatives that you might consider are, first of all, making the employer(s) a party to the divorce action, with the sole purpose being for them to prepare the "qualified domestic relations order." Another alternative is networking through your local secretarial/legal assistant associations for information on various company plans. The last, and maybe the best, solution is to lobby the legislature to amend the laws so that the IRS, ERISA and the statutes on QDRO's are compatible. Let's face it, this is an ongoing problem for those of us in family law, and helping each other makes the task a little easier.