DIVISION OF RETIREMENT BENEFITS
Aside from equity in the parties' home, the biggest asset many couples have are
their retirement benefits.
If a person has been working at Ford, GE, etc. for 20 years, he or she will
likely have accumulated a fairly sizeable amount of money in their pension,
retirement plan, defined benefit plan, employee stock ownership plan (ESOP),
defined contribution plan, savings & security plan, 401(k), annuity, etc.
Marriage during all or part of the employee's tenure likely will make some or
all of these funds marital in nature. Portions of the funds may be
non-marital.
A qualified Family Law attorney should be able to explain to you what portion,
if any, of your retirement or your spouse's retirement should be characterized
as marital.
Certain retirement benefits (such as Kentucky public school teachers) may be
exempt from division as a marital asset. Again, your attorney should
be able to discuss this with you in greater detail.
After settlement is reached or a decision obtained from the Court, it may be
necessary for one of the parties' attorneys to draft a
Qualified Domestic Relations
Order ("QDRO"), which must be approved by the opposing party, then by
the employer's Plan Administrator and, finally, submitted to the Court for entry
as an official Order. A certified copy of the QDRO then needs to be
delivered to the Plan Administrator for implementation.
See the U.S. Department of
Labor's publication on "The
Division of Pensions Through Qualified Domestic Relations Orders"
at www.dol.gov for general information
on this subject.
Properly crafting a QDRO is a very tricky task and should only be undertaken by a fully
qualified Family Law attorney. The QDRO usually cannot be finalized until after
the Decree of Dissolution has been entered. QDRO
drafting requires the application and incorporation of both state and
federal laws pertaining to equitable distribution of pensions. It
is a very specialized area of practice. Our
office refers to outside counsel the task of drafting QDROs or COAPs
(the federal employee equivalent for CFRS and FERS, known as a
"Court Order Approved for Processing").
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