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Jerry Reiss ASA**

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1st Step (Essential)
Benefit Valuations
QDRO'S
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QDRO'S
 
 
All retirement benefit plans and many deferred compensation plans contain a non-assignment clause.   Its purposes is to  protect  the  benefits earned  from  attachment  by  creditors.    A  court awarding  a  spouse  a  percentage  of  these  benefits has to deal with this non-assignment clause.    They often overcome this problem by dividing the benefits with a QDRO or a QDRO-like order.    The QDRO or QDRO-like mechanism used to divide the perk is based  on  federal  or state laws that allow a family law court to award  the  benefit  through  an  assignment.    The state or federal law authorizing exceptions to the non-assignment clause limits them to spouses involved in matrimonial litigation.  These enabling statute were first created in TEFRA, 29 USC 1056(d)(3).  But even before these stautues earlier case law found that spouses were not creditors but were actually part of the protected group from garnishment. 
 
 
 *Listed in Best Experts in America.®   

 DRAFTING QDRO'S

 

  • Drafting QDRO's requires an exceptional understanding of the legal requirements of plans
  • Drafting QDRO'S requires an exceptional undertstanding of the way plans work
  • Drafting requires an an exceptional understanding of benefit features
  • Drafting requires an exceptional understanding of the state legal issues affecting property division

 

You get what you pay for.  Most who claim to have skill do not.  Skilled people charge for that skill.  If you are quoted $500 or less it is very likely that the drafter lacks skill or will be cutting corners that should not be cut.  Both occur with most drafted QDRO's.  This has disastrous results to one of the spouses and that harm is visited on either spouse.  Incompetence knows no favor.  It is the reason why the spouse who did not prepare the QDRO should get it reviewed by someone competent.  

 

DEFECTS OF MOST QDRO'S

 

As Property Divisions

 

  • They fail to follow state law.
  • They fail to follow settlement agreements.
  • They pander to the interest of plans sponsors at the expense of the parties.
  • They are fixable only when the plan requires it, not when they fail to divide the correct amount.

 

As For Paying Support

 

  • They seek to divide benefits for impermissible reasons like fees and costs.
  • They often divide benefits ineligible for division under state law.

 

 

Serious defects are frequently visited upon drafted QDRO'S

 

Almost all family law attorneys lack understanding of the way plans work, the law that governs benefit divisibilty, what can and what cannot be divided with a QDRO or QDRO-like order or how or when electing certain benefit features affects the division.  Retirement Plan attorneys who are sometimes retained to divide these plans lack appreciation of family law issues and are often illequipped to divide the right amount of property. 

 

 

 WHAT CAN YOU DO

 

  1. Retain competent people to draft them.
  2. Require the plan sponsor to write a detailed letter explaining how they will be interpreted.
  3. Retain a qualified expert to review them.  (There are but a handful qualified througout the US and a limitless supply who claim to be.)
  4. When all else fails, explore suing your attorney who entered a defective order even if he or she did not prepare it.

 

Requiring the Plan Sponsor to write a detailed letter explaining precisely how the order will be interpreted will not always be workable. Most sponsors will resist this request because it will be too expensive for the plan.  But some will and this should always be tried first.  Even when it is done, that, by itself , does not ensure that the division complies with the state law or the terms of the settlement agreement.  This is a huge problem seldom dealt with by family law attorneys.   The errors visited on drafted QDRO'S are frequently egregious.

 

Retaining qualified expertise to review the order shifts the burden for paying the true cost to draft them to your spouse who prepared it.  Retaining qualified expertise protects your interests at a fraction of the real cost to draft them. Reviewing defined contribution Orders start at $300.  Reviewing defined benefit order start at $500.

 

Unlike 99% of the experts who draft QDRO'S, Jerry Reiss,* ASA, has more than 20 years experience with the design and administration of retirement plans.  He understands all administrative issues and, as he designed plans to meet with employer and employee needs, he understands the way in which these benefits work.  He is therefore uniquely qualified to review Orders prepared by the other side.    This experience has shown that most drafted Orders violate case law on what was or could be provided and vary extensively from agreements that the parties reach.  He is also available as a consultant on the construction of difficult QDRO'S.    As he was instrumental in creating most of the case law dealing with this subject matter in Florida, he has a great claim to the qualifications needed to review these orders in Florida and elsewhere.   He wrote one of the earlier bar journal articles on the subject.  Jerry Reiss & A. Matthew Miller, Drafting QDRO’s:  A Malpractice Waiting to Happen, Parts I and II.  Part II is available at Lexis and Westlaw and both parts are now provided in the publication links section.