The Employee Retirement Income Security Act (ERISA) was created to protect employees’ retirement money, but it made it hard for ex-spouses and dependents to access that money in divorce cases. In 1984, Congress made changes to ERISA with the Retirement Equity Act, which included the creation of a qualified domestic relations order (QDRO) to help ex-spouses and children access the retirement money. QDROs are now a common tool in divorce cases in Florida. In the 1980s, the term “QDRO” wasn’t used in any high-level Florida court cases. But the courts were dealing with issues related to retirement accounts and how to figure out the part of the account that belongs to the marriage. Back then, traditional pension plans were more common than 401(k)s, which were just created in 1981. Figuring out the value of pensions was tricky, and these cases helped set the stage for later cases about QDROs. In a series of court cases, the Florida Supreme Court and Second District Court of Appeal established that retirement accounts are considered marital property that must be divided in divorce cases. They also provided guidance on how to calculate the value of the pension and determine the appropriate method for dividing it. Additionally, a 1992 case addressed retirement accounts in the context of small businesses. In Shannon, the husband was in charge of the family business’s retirement plan. The court made a decision about how the retirement money should be divided in December 1988, but the husband took more than 14 months to give the wife her share. He said he had to fix some tax issues first. The court said he had to pay interest on the money he owed, but only until it was possible for him to pay. This means that a small business owner can’t delay paying money out from a retirement plan after a court order without getting in trouble. In the 1990s, there was a case where a husband retired and his wife wanted a part of his pension. The court said that the pension was not covered by certain laws, so the wife couldn’t get a part of it. This case showed that not all retirement plans are the same and not all of them can be divided in a divorce. So, people have to follow different rules depending on their specific retirement plan. In Florida, when couples get divorced, the court can use a qualified domestic relations order to divide retirement accounts. In one case, the court ruled that the husband’s pension benefits accrued after the divorce couldn’t be awarded to the wife. But, the court can still award such amounts as support or for attorneys’ fees. In another case, the court said that fees can be taken from a party’s retirement account if they have the ability to pay. So, the court has the power to use retirement accounts to pay for legal fees in a divorce case. From 2000 to now, the laws in Florida about dividing retirement accounts in a divorce got more specific. Courts made rules about things like taking out loans from a 401(k) and who has to pay the taxes. For example, in one case, the court said that if someone takes a loan from their 401(k) and only uses the money for themselves, it doesn’t count as part of the divorce. And in another case, the court said that the person getting the money from the retirement account can’t make the other person pay the taxes. In Jahnke v. Jahnke, the court said that a final judgment doesn’t have to specifically say it can make a QDRO. But it should say it can enforce the terms of the agreement. In Blaine v. Blaine, the court said a QDRO can’t give benefits that weren’t in the final judgment. And in Padot v. Padot, the court said survivor benefits for military pensions have to be in the final judgment, not added later. The court in Jones v. Treasure said that a QDRO has to follow the final judgment or it will be reversed. So, make sure all benefits are in the final judgment or you might lose out in the QDRO. In simple terms, ERISA and Florida have worked well together in handling the division of retirement accounts in divorce cases. The QDRO has become an important tool for enforcing these divisions, and while there are still unresolved issues, lawyers need to stay updated on how the law may change in the future.
Source: https://www.floridabar.org/the-florida-bar-journal/a-survey-of-significant-qdro-case-law-in-florida/
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