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QDRO to Collect Past Due Child Support
Overview of a Utah QDRO and Dividing Utah Retirement Accounts
Generally, if both spouses have retirement or pension plan benefits, each will be awarded their own benefits. Utah courts have recognized that it is best for the spouse who contributes to the retirement or pension plan to receive all of the benefits and for the other spouse to receive something of equal value, such as equity from the home or cash or other property. If there is nothing of equal value to give to the other spouse, then the retirement benefits may have to be split.
Retirement and pension plans include defined benefit plans and defined contribution plans, 401(k) plans, state and federal government retirement or pension plans, private employer benefits, and some military retirement benefits. Retirement and pension plans are regulated by federal and state law and by plan policies. As a general rule, anything paid into any type of retirement or pension plan by either party from the date of the marriage to the date of the divorce is marital property.
In Utah vested pensions are marital property. A pension vests when all the requirements to receive the pension have been met. Unvested pensions are also marital property. Until the pension has vested, the person under whom the pension is maintained has only an expectancy of interest in the pension.
Several different methods of valuation are used in determining how much a marital asset is worth, depending upon the asset to be valued and the level of agreement between the parties. Courts generally accept the value when the spouses mutually agree on a value of a particular asset. Experts may be retained by the parties or by the courts to determine the value of marital assets if the parties cannot agree. Such experts may include accountants, real estate or business appraisers, or pension valuators. The use of experts adds to the cost of the divorce.
In Utah the court may include the retirement benefits and plans earned by both spouses as marital assets available for division.
Retirement benefits vary greatly but can generally be divided into two groups:
- Defined Contribution Plans: A defined amount of money belonging to the employee. The employee and/or the employer make defined contributions. The balance of the plan is constantly changing, but its value is definable at any given point. 401(k)’s, 403(b)’s and profit sharing plans fall into this category.
- Defined Benefit Plans: A retirement benefit where an employer promises to pay a benefit to an employee sometime in the future, based upon some type of formula. Normally, this formula is based on the employee’s salary near the end of his or her career and the number of years he or she worked for the employer before retirement. Defined benefit plans are much more complicated to value and often require the professional evaluation of an actuary to determine exact values.
In Utah, if spouses share in each other’s retirement or pension plan, a Qualified Domestic Relations Order must be completed. A QDRO is a written set of instructions that explains to a plan administrator that two parties are dividing pension benefits. The instructions set forth the terms and conditions of the distribution - how much of the benefits are to be paid to each party, when such benefits can be paid, how such benefits should be paid, etc.
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