QDROs – Your Last “To Do” Item on Your Divorce Checklist

QDROs – Your Last “To…

The recent unpublished Appellate Division case, Canonica v. Canonica, reminds us why Qualified Domestic Relations Orders (“QDROs”) should be done in a timely manner. A QDRO is an order by which a retirement account is divided pursuant to a Judgment of Divorce and/or Marital Settlement Agreement (“MSA”). Your MSA should state who pays for the QDRO (or how the cost should be divided), and what retirement accounts need to be divided by a QDRO. Sometimes, parties forget to divide their retirement accounts after a divorce – you have focused your time and energy in either attending mediation or negotiating an agreement and you want to be done.

While we (attorneys) understand the importance of a fresh start, you do not want to forget to finalize your QDRO paperwork. You may choose to have your attorney assist you with the QDRO process or may choose to do the QDRO process on your own. Regardless of your decision, you should start the QDRO process shortly after your divorce is entered. This allows you to not worry about the paperwork 5, 10, or 30 years down the road. You can put your mind at ease knowing the process is done.

In Canonica, the parties were divorced in 1993 and entered into a MSA, which set forth how the plaintiff’s pension would be divided. The defendant, and her then attorney, prepared a QDRO and submitted it to the New Jersey Division of Pension and Benefits. However, the proposed order was not correct. The defendant retained a different attorney to resolve the issue, and even corresponded with the plaintiff’s (then) attorney. Nevertheless, it appears that no one made sure a corrected proposed QDRO was submitted to the Division and was accepted by the Division. No one made sure the plaintiff’s share of the defendant’s pension was secured before moving on.

Fast forward to July 2018, the plaintiff retired and started collecting his pension. The plaintiff had remarried and designated his second wife as the beneficiary of his pension. The defendant was not receiving her share of the benefits. When the defendant learned of this, the defendant filed a motion to enforce the parties’ MSA regarding her share of the pension, which the plaintiff opposed (and requested other relief). The plaintiff attempted to argue that the defendant had waited too long to enforce her pension rights, and the defendant should be barred from obtaining a portion of the pension.

The Appellate Division disagreed with the plaintiff finding that the defendant did not forfeit her right to the plaintiff’s pension. Based upon the facts presented, the defendant’s first order to the New Jersey Division of Pension and Benefits was denied, and the defendant hired another attorney to address the QDRO issue. The Appellate Court also found that although the defendant could have sought to enforce the MSA sooner, her delay was not inequitable, as the plaintiff had retired in July 2018.

The takeaway from the case is to be diligent with QDROs. It is better to finalize them sooner rather than later. In this case, the defendant was successful in “fixing” the problem caused by the delay. However, she undoubtedly spent tens of thousands of dollars in legal fees in family court and then the Appellate Division to do it. Take the time to finalize the QDROs after your divorce to further avoid litigation in the future.

If you are experiencing an issue with your former spouse regarding a QDRO, or another family law issue, please do not hesitate to contact our office and schedule a consultation.

href="https://www.familyfocusedlegal.com/attorneys/sofia-m-ucles/">Sofia M. Ucles, Esq. is an Associate with Ruvolo Law Group. She joined the firm in March 2021. To schedule a consultation with Sofia, please call 973-993-9960 or submit your inquiry through our Contact Us page.