QDRO
I am not familiar with this topic at all so please educate me….I have a client that was asking about about a QDRO and an a disputed amount. The 401k was worth $210,000 and is currently worth $150,000. The wife is telling the ex-husband (the owner) that she is entitled to half of the $210,000 not the current value. What is the answer to this dillema? Thank you
Lewis
Permalink Submitted by Anonymous (not verified) on Thu, 2009-02-19 21:40
That depends on the specific terms stated in the QDRO, and was subject to negotiation between the parties. Counsel drafting these orders realize that the value of any retirement account is subject to large daily fluctuations, so the QDRO should be specific about valuation dates and how a later date of partitioning the account or creating separate sub accounts would affect the valuation transferred. Failure to address this issue would produce a guaranteed dispute and probably additional legal fees.
Usually, the terms of the QDRO are designed to reflect that part of a total settlement including non retirement assets and includes tax adjusted values of the various assets being awarded. There is no standard wording, but mandatory state provisions could affect some of the terms.
When asset values are dropping like they have been across all classes, a dispute like this one will not have a winner and loser as would be the case with rising asset values, but rather a loser and a bigger loser.