ATTORNEY FEES QUALIFIED DOMESTIC RELATIONS ORDERS

Query:
Is there an ERISA bar to a Domestic Relations Order’s inclusion of attorney fees attributable to work relevant to enforcement of a division of property, alimony or child support arrearages?

Response:
A Domestic Relations may Order properly include attorney fees for work relevant to implementation and enforcement of a Qualified Domestic Relations Order providing for any of the following: child support, alimony payments, marital or community property rights to a spouse, former spouse, child, or other dependent of a participant.  This includes both the initial Qualified Domestic Relations Order as well as supplementary Orders attributable to any failure of the titled-spouse to comply with the terms of a Qualified Domestic Relations Order.

In spite of support for this view found in both federal and state court decisions, there remains an inexplicable reluctance on the part of attorneys to incorporate into Property Settlement Agreements and subsequent Domestic Relations Orders language providing for attorney fees.  Does a federal bar to such Orders exist?  We find no ERISA or Retirement Equity Act provisions barring an attorney from receiving fees for his or her implementation of a Domestic Relations Order relating to provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant provided such Domestic Relations Order is drafted pursuant to a State domestic relations law (including a community property law).   Assuming your state does not bar such awards, it is our view that there is no federal bar.  There is a body of both federal and state law in support of our position.

As a practical matter it is suggested that the focus of the attorney seeking this type of Qualified Domestic Relations Order should be the titled-spouse’s Qualified Defined Contribution Plan, because these plans uniformly contain a Lump Sum Payment option. Hence, these plans provide a ready source of cash for the remedy sought.  The cash in these plans may be immediately distributable or segregated for the exclusive use of the Alternate Payee. 

Further, be aware that so long as undistributed or unassigned assets remain in the titled-spouse’s Qualified Defined Contribution Plan you may continue to direct Orders against this asset until 100% of the account is the property of the Alternate Payee.  Attorney enforcement fees may be a continuing part of a QDRO distributions process.

What about a Plan that came into existence after the parties divorce?  There is case law supporting the view that such plan is a proper vehicle for the QDRO since the QDRO is incident to a default on an award relating to an earlier divorce.
This firm will assist the practitioner in preparation of this form of Qualified Domestic Relations Order.  For details contact Troyan, Inc.

CASES FOR THIS ARTICLE

Adler v. Adler; 638 N.Y.S.2d 29
Anonymous v. Anonymous; 2001 U.S. Dist. LEXIS 20928
Iannotti v. Iannotti; 1997 Conn. Super. LEXIS 146
Sears v. Gago; 717 F.2d 1038
Silverman v. Spiro; 784 N.E.2d 1
Thomas v. Thomas; 789 N.E.2d 821
Tise; 255 F.3d 661
York v. York; 751 N.Y.S.2d 417

ROBERT D. SILVERMAN vs. CLAUDIA A. SPIRO.(MA)

Esther York, appellant, v Joseph York

Lorna J. Renner, Plaintiff, v. Marc Blatte, Defendant. (NY)

Laura Iannone, appellant, v Domenic Iannone, et al., respondents

Keegan v Keegan, 204 A.D.2d 606, 612 N.Y.S.2d 187;
Bumstead v Raisbeck, 230 A.D.2d 759, 646 N.Y.S.2d 368;
Adler v Adler, 224 A.D.2d 282, 638 N.Y.S.2d 29;

Zamos:
The QDRO Covers Amounts Due for Support and Marital Property Division.

ALSO OF GENERAL INTEREST
However, it is now well established that a state court has subject matter jurisdiction to decide whether a domestic relations order is a QDRO, even if the order itself may be substantively defective. (In re Marriage of Shelstead (1998) 66 Cal.App.4th 893, 905.)

From Zamos (CA)
A QDRO May Be Used to Collect Unpaid Support and Marital Property Obligations from a Defined Benefit Pension Plan Created After the Dissolution Was Final.

From Zamos
The order here did not modify the obligations owed by Jerome under the 1982 decree, but merely provided a method for enforcing those obligations. n8 (See In re Marriage of Bruns (Iowa App. 1995) 535 N.W.2d 157

Zamos
The commentators, n9 and the courts in numerous other states, n10 have concluded that a QDRO may be used to enforce the collection of arrearages on payments owed for support and marital property rights, and we conclude the QDRO here was properly employed to enforce Jerome's past due obligations to Patricia.
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n9 See Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2002) P18:259 et seq., p. 18-86 et seq.
n10 In re Marriage of Bruns, supra, 535 N.W.2d at p. 161; Baird v. Baird (Mo. App. 1992) 843 S.W.2d 388, 391-392; Stinner v. Stinner (Pa. 1989) 520 Pa. 374, 554 A.2d 45, 47-49; Hogle v. Hogle (Ind. App. 2000) 732 N.E.2d 1278

Calif Ct.

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