Any type of retirement plan needs to be handled in a special way to ensure the non-participant spouse receives the percentage awarded to them.
Many people do not realize what needs to be done to ensure payment happens when retirement comes along. An order for payment in the Judgment does not guarantee the plan will make the payment. First the plan may know nothing about the order. If they don’t know about it, they aren’t going to send the payment due. Second, there is no valid court order as to the plan if the order for payment is only set forth in the Judgment.
By law, a court can only make a valid order against a person or entity who is a party to the court case. So, by definition, if the plan is not a party to the divorce, the court order does not and can not bind them.
When a plan is going to be divided, a Summons and Petition for Joinder are filed with the court. The papers must be served on the plan. The plan then files a response. This now makes the plan a party to the divorce action. The court can now make an order the plan must follow.
The next step is the order. A copy of the Judgment alone is not sufficient. A special order called a Qualified Domestic Relations Order (QDRO for short) must be prepared. The order is approved by the retirement plan, signed by the parties and counsel and then sent to court for the judge’s signature. this makes the QDRO a valid binding court order. The order is served on the plan. The plan will recognize the QDRO and follow the order contained in it.
The order will be kept and at retirement the plan calculates the amount the spouse and non-participant spouse will receive. Each will receive their own check. One thing to always remember is to keep the plan updated on your address so they have the correct address to send the check to.
No comments:
Post a Comment