Qualified Domestic Relations Orders (QDROs) assist courts in distributing marital portions of pension and retirement benefits between spouses. Essentially, they direct a Plan Administrator of a benefit fund to take a certain percentage of a fund held in the name of one spouse and place it in a new fund of the former spouse, with the benefits to become available under the same rules that apply to the fund-holding spouse. A QDRO serves a limited purpose – to execute a distribution of property already made by the court in a dissolution judgment.
This week, the Eastern District of the Missouri Court of Appeals faced a very interesting fact situation involving a QDRO. In Laenen v. Laenen, Husband and wife divorced in 2010. The judgment ordered wife to receive one half of Husband’s pension through Anheuser-Busch unless wife remarries (the parties reached a settlement agreement on the property the court incorporated in its judgment). The court did not issue a QDRO. Husband remarried in 2011 and died in in 2012. After death of husband, wife sent a letter to the court to issue a QDRO to protect her interest in husband’s pension. The court directed the attorney for husband during the dissolution to prepare a QDRO for the court to sign awarding wife half of the balance of the pension. After the court issued the QDRO, new wife intervened and tried to set aside the QDRO, claiming the court had no authority to do so and that the QDRO went beyond the language of the judgment. The trial court denied the motion to set aside, and new wife appealed.
The Eastern District had to reach two key issues. First, could a court issue a QDRO not ordered in the judgment and after the death of the named beneficiary? The Eastern District answered this question “yes,” because a specific Missouri statute and cases interpreting the statute allow a court to enter a QDRO to assure the proper distribution of property in the judgment, and the only way to partition a retirement fund is through a QDRO. Because Wife obtained a vested interest at the time of judgment, the survival of the husband was not necessary to issue the QDRO.
Next, the Eastern District had to deal with the conditional language of the judgment. The QDRO ordered the wife receive her half share without any conditions, but the judgment clearly conditioned the receipt of benefits on wife not remarrying, so the appellate court concluded that the QDRO deviated from the judgment and needed to be rewritten to contain the limiting language – wife can receive and continue to receive benefits only so long as she does not remarry. Assuming that wife has an option to receive a lump sum taking of the benefit, and she subsequently remarried, the estate of husband could seek reimbursement for those benefits.
Could a court normally enter a conditional judgment on a pension benefit? No, but in this case the parties agreed to it and the court only had to find the agreement not unconscionable.
So long as a QDRO is consistent with the language of the judgment, the QDRO may issue at any time, even after the death of the pensioner spouse.
If you have questions about a QDRO, contact our St. Louis divorce attorneys – we can help.