By Harry J. Lenaburg, Esq.
Certain retirement plans that may constitute community property in Arizona are creatures of the Employee Retirement Income Security Act of 1974. That law has been added to and changed many times since 1974, and its purpose was to establish minimum standards for pension plans in private industry. Under the terms of the act in order to enjoy favorable tax status the pension plan must be “qualified”.
When a family court judge orders a division of a qualified pension the plan administrator will be unable to take any action without receiving a required Qualified Domestic Relations Order (QDRO). This document, signed by the judge, directs the plan administrator on how to specifically distribute the funds in the plan. This may sound simple enough; however, generally speaking each plan has their own form or format for the information regarding that plan, the member of the plan, and the non-employee recipient of a portion of the plan. Here in the valley there are a handful of attorneys who prepare most of the QDROs. The preparation of a QDRO is seldom included in the dissolution family law fee agreement in the divorce setting.
I am surprised at the number of individuals whom I meet with where their issue is a division of a qualified plan, and no one followed through with the preparation of the QDRO. If a qualified plan is one of the community assets in your dissolution, be certain that a QDRO is prepared, signed by the judge, and properly delivered to the plan administrator.
We are always available to meet with you to discuss your Arizona family law issues. Contact our office for an appointment.
The Law Firm of Jessica M. Cotter, P.L.L.C.
18301 North 79th Avenue, Suite F-168
Glendale, Arizona 85308