Can my bank do this?

Submitted by Leo Ioffe on Thu, 2021-04-29 22:33

My ex wants me to designate part of my ira as security for my child support obligation. She wants me to have the bank ensure there is always a certain amount in the account and to prevent me from taking out any money if it causes the balance to fall below that number. Assuming all the holdings are in cash and are not subject to market fluctuations, is something like this even possible or legal?

I asked the bank, they told me to ask my attorney, who told me to ask the bank in the first place.

I know this is not strictly speaking an IRA question, but does anyone have any idea?



Submitted by William Tuttle on Fri, 2021-04-30 04:00

Listen to your bank. Some of what your ex and you are proposing would likely be prohibited transactions.
The only way to do anything resembling this is with a qualified domestic relations order (QDRO) from a court.
This is very much subject to state laws and precedence. Are you in significant arrears? It would not be common for a child support QDRO to be issued absent significant or a pattern of arrears.
This would almost always involve wage garnishment, taxable accounts, etc…, before any retirement accounts.
If the facts and circumstances warrant it. This will require lawyers and court orders.
If your lawyer said ask the bank, you need a new lawyer. Competent family law counsel should be familiar with these issues.

Submitted by Leo Ioffe on Fri, 2021-04-30 04:09

i am not in arrears and don’t owe anyone any money, other than my mortgage. she simply wants this “just in case” to stop me from absconding with this money. Really, she’s just trying to make up for what she considers a bad settlement.

Submitted by William Tuttle on Fri, 2021-04-30 12:37

While IRA and even 401k accounts can be subject to spousal and child support claims. She has absolutely no basis to make a claim.
Subject to settlement terms, these are your assets.
I used to work for a large government contractor who ran automated child support payment systems in the majority of states.
While originally intended for deadbeat parents. Many allowed voluntary enrollment.
Some individuals preferred their child support payments to automatically be deducted from their paycheck or debited from their bank account by the state. That way the other party could not claim the payments were not being made.
Absent the state providing a mechanism, you might still be able to do this by payroll direct deposit or financial account direct debit.

Submitted by Leo Ioffe on Fri, 2021-04-30 14:36

I also have it automatically deducted from my bank account, not the ira one. It goes through the state’s probation department.This is nonsense, of course. Done out of spite. I am just trying to get ahead of it. Thank you for the information. 

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