QDRO Law Update

Prenuptial Agreement Ineffective as Against ERISA

jvmac@mac.com — 2008-03-07T21:25:07-06:00

A prenuptial agreement alone does not meet ERISA requirements.

The Sixth Circuit recently considered a case called Greenebaum Doll & McDonald PLLC v. Sandler in which a man's children from a prior marriage sued their father's widow to enforce a prenuptial agreement in which the widow waived any claim to her husband's retirement benefits.

The Sixth Circuit held that a United States District Court properly dismissed the suit because the prenuptial agreement did not meet ERISA's requirements. Although in the prenuptial agreement the widow had agreed that she waived and released any claim to her husband's retirement benefits, the husband's employer's retirement plan designated the surviving spouse as the beneficiary of any retirement benefits unless the participant formally changed that designation. the husband did not change the designation, so upon the husband's death, his widow received all the retirement benefits despite the provisions of the prenuptial agreement.

Child Support Collection by QDRO

jvmac@mac.com — 2008-01-25T10:06:08-06:00

Some assets, including retirment plans, cannot be taken to satisfy court judgments. But the Employee Retirement Income Security Act ("ERISA") contains an exception: A QDRO can be used to collect child support.

In a recent case called Blue v. UAL Corporation, a custodial parent collected over $200,000 in back child support from the noncustodial parent's retirement plan. The court also allowed collection from the retirement plan of the attorney's fees incurred in collecting the back child support.

When is a DRO a QDRO?

jvmac@mac.com — 2008-01-15T10:24:00-06:00

Suzanne Wynn at the Pension Protection Act Blog tells us "What Makes a Domestic Relations Order a QDRO" according to the United States Court of Appeals for the Sixth Circuit:

The term “domestic relations order” means any judgment, decree, or other order (including approval of a property settlement agreement) which (I) relates to the provisions of child support, alimony payments, or marital property rights to a spouse, former spouse, child or other dependent of a participant, and (II) is made pursuant to a State domestic relations law (including a community property law).

In addition, for a domestic relations order to be considered a QDRO, it must satisfy the following additional criteria:

1. the order clearly specifies the name and the last known mailing address (if any) of the participant and the name and mailing address of each alternate payee covered by the order;
2. the order clearly specifies the amount or percentage of the participant’s benefits to be paid by the plan to each alternate payee, or the manner in which such amount or percentage is to be determined;
3. the order clearly specifies the number of payments or period to which such order applies; and
4. the order clearly specifies each plan to which such order applies.