What Is a QDRO or “QUADRO”?

A QDRO (or Qualified Domestic Relations Order) is Court order after a divorce or that splits and changes ownership of a retirement plan to give the divorced spouse their share of the asset or pension plan.

QDROs apply only to employee benefit or pension plans under ERISA.  
Retirement benefits are among the largest assets parties can own and these benefits are considered community property unless there is a premarital agreement stating otherwise.

QDROs were created by Congress to allow a Retirement Plan to pay a portion of the retirement fund to the non-employee spouse or the alternate payee. There is no limitation on the amount awarded to a non employee spouse. While many family lawyers may not tell their clients this fact, a QDRO distribution is not limited by federal law to 50% distribution.  In fact, under ERISA, the non employee can be awarded “all or a portion of” the benefits payable to or on behalf of a payee.  ERISA 206(d)(3)(B)(l)

If you are doing a QDRO yourself, you can request information from the Plan, in writing, including such as the Summary Plan Description and Annual Statement or Account Balance.  A word to the wise, do not count on a plan doing the actuarial valuation – that is something you will need to speak with a forensic accountant. 
Each retirement plan is different and many have specific rules. For example,in California, there is a joinder process for Family Court and the Court must have jurisdiction over a third party and you must join the Plan before administration.  
Additionally, you have to tell the Plan you are asking for a QDRO before you ask for a Court order.  It is best to speak with an attorney because you could cost yourself time and money if you simply fill in the blanks of a mock QDRO without carefully tailoring the document to your circumstances.  One more thing:  QDROs should be filed and served before your divorce is final.  Don’t wait to get your QDRO done – if the employee spouse dies before the QDRO is signed – then the non employee spouse will not be entitled to any benefits.

Looking to figure out if your retirement plan qualifies for a QDRO? Check out our nifty chart. 

Is my speculative bonus income used for a child support calculation?

No. This is different than Ostler/Smith Orders. Under California Family Code Section 4508, speculative bonus income – such as the potential to make a large commission at the end of the year, cannot be included in income used for calculations of spousal and child support. This is because a court may not base monthly support amount on predicted receipt of large bonus that may never materialize.

Other types of money that cannot be included as income are: Student Loans not used for books and tuition and Life insurance death benefits.

However, Gordon Family Law does not advise that you hide all your cash in speculative bonuses or student loans to avoid payments. Why? Because even if the Court rules that a certain category of income is not includable as gross income for the purposes of calculating guideline support, a party can ask the court to deviate from the guideline based on the income received as a “special circumstance,” which would allow the court to increase child or spousal support. 

What is “income” for the purpose of child and spousal support?

Child and Spousal Support calculations are one of the most complicated issues in a divorce.  California Family Code Section 4508 governs how income is calculated for the purpose of support.

Before spousal support or child support can be calculated, each party must disclose their income on an Income and Expense Declaration (FL 150), one of the most crucial forms in your child support case. Calculating support may be as simple as looking at a paycheck stub, but if the party makes income from a variety of sources, be sure to contact a family law attorney to help you run a Dissomaster account because the calculations can actually be sophisticated and complicated.

The Court has wide discretion when determining what is income for the purposes of support and has included benefits and here are some examples of income used for support calculations under Family Code 4508 that you may not expect:

·       Commissions

·       Royalties

·       Bonuses (Marriage of Ostler/Smith)

·       Rents

·       Dividends

·       Pensions

·       Interest

·       Trust income

·       Annuities

·       Social Security benefits

·       Military allowances for housing and food

·       The value of company car

·       Subsidized housing as income. 

·       Re-occurring gifts

I often talk with clients who remember generous relatives who gave annual gifts of $14,000 to their grandchildren and children. If those gifts have not been included on the FL – 150, you should make sure that the other parent discloses these gifts on the income and expense declarations as reoccurring and regular monetary gift from a payer’s parents are income for the purpose of support.

Want to learn more about what is NOT included for support payments? Click here to read about what is not considered income under California Family Code Section 4508.

When does a court look at my ex’s ability to earn to calculate support?

Is my speculative bonus income used for a child support calculation?

I want to stop paying spousal support, what are my options?

Are you tired of paying spousal support?  If you are obligated to pay spousal support, you may be frustrated.  However, before you stop paying altogether you should read the following article to understand the consequences for failure to pay spousal support. Here are some important facts that experienced San Francisco Bay Area family law attorneys want you to know before you decide to willfully stop spousal support payments to your ex.  

(1) You May Be Able to Ask the Court For A Reduction of Payments

Some spousal support orders are modifiable by the Court. To determine if your spousal support order is modifiable you should look at your marital settlement agreement and read the language to see if your agreement has modifiable or non-modifiable support terms. 

In California, the Court can modify or terminate a spousal support order at any time, unless there is language in your marital settlement agreement that specifically precludes modification.

Examples of non- modifiable language that could preclude a change to the order include any of the following terms:  this agreement for spousal support cannot be modified; this agreement cannot be modified until ----- ; this is a non-modifiable agreement; or this agreement cannot be modified simply on the basis that the income or expenses of the parties has changed to a substantial degree.

A spousal support order is modifiable if there is a provision in your spousal support order that uses the words .. or upon court order. Those words usually mean that the support ordered can be changed if the moving party shows a material change in circumstances since the order was made. This change in circumstances cannot be a demotion or a child’s education decisions.  Instead the change must be such that the parties are in very different positions than they were at the time the order was made.

If you have experienced a change in circumstances – like caring for the health of a relative or a new spouse, you may be able to change your spousal support order. However, if the language of the order is non-modifiable – you need to understand the consequences of failing to pay.  

(2) Failure to Pay Could Result in Owing Even More To Your Ex Spouse.

Past due support orders accrue interest at 10% from the date of each installment becomes due. Family Code Section 155. This means that every payment you miss accrues interest.  Furthermore, support orders may be enforced like any other money judgment. This means that your ex may obtain a Writ of Execution and enforce a money judgment against your bank accounts, property, or even pension.  
This is even more important because courts do not have discretion to relieve the obligor of the interest and unpaid support cannot be discharged in bankruptcy. But let’s say you don’t care about the money, maybe you care about avoiding jail.

(3) Willful Failure to Pay Spousal Support Could Send You to Jail

If you have failed to pay support or paid only part of what you owe and you have the ability to pay, your ex spouse can file a motion for Contempt of Court. If you are found in Contempt because you have the ability to pay but have evaded payment, then you can expect to be fined and/or incarcerated unless you have a defense.

Contact a family law attorney now if you are facing a Contempt charge you can contact me at amanda@gordonfamilylaw.com.
 

Looking for more posts on spousal support:
 

My ex stopped paying child support - what can I do?
My child’s mother does not follow our visitation schedule, how can I get her to comply?
What to do if your ex does not pay support or follow visitation: how to file for Contempt.

Is your ex-spouse a "deadbeat"?

Is your child's father or mother not paying you the child support he/she owes? This article discusses your options.

In California, both parents have a duty to provide support for a child. Whether parents are unmarried, divorced, or separated, child support is usually paid by the parent who does not have primary custody of the child. These payments are intended to cover the child’s food, clothing, and housing, medical care, and education.  

Despite the existence of State guideline formulas, child support payments are one of the most contested aspects of divorce proceedings. Before we look at how to enforce child support payments, it’s important to keep in mind that visitation rights are entirely separate from child support obligations.  

To ask the Court to enforce your child support payments with Contempt, you must make sure that you have a written child support order. This order can be found in your Marital Settlement Agreement or in FL – 342 Child Support Information and Order Attachment. For child support and family support orders it does not matter if the order is based upon the court’s order after a hearing or based upon a stipulation of the parties.   

If there has been a failure of the other parent to pay child support, contempt proceedings are appropriate even if only some part of the child support is paid or if the child support is paid late.

The elements of contempt based on a failure to comply with a child support order differ slightly from other contempt cases. A prima facie case for child support contempt requires (1) a valid court order; (2) the other parent's knowledge of the order; and (3) noncompliance. Once this is established, the person charged with contempt has the burden of showing inability to pay by a preponderance of the evidence. This is different than other contempt cases because the person asking for contempt does not have to show that they know the other party has the ability to pay.

If the Contempt of court proceeding is for a willful violation to pay support, the contempt proceeding must be started no later than three years from the date that the payment was due.  

One important consideration is whether or not a partial payment is being made as opposed to a complete nonpayment.  In situations where there is a complete nonpayment of support you should look into whether your ex is paying other debts such as a mortgage or student loans or if his/her paycheck is being spent on entertainment or a high cost of living. 

It’s important to know that if the other parent doesn’t have the financial ability to make the child support payments due to unemployment or lack of available income, the Court is unlikely to hold the parent in Contempt but they will require that some of the unemployment income goes to support and they may order a parent to participate in job training or to comply with the terms of a seek-work order.   

However, unemployment without proof of attempts to find work is probably is no longer a defense. You can use a parents ability to earn to support a Contempt adjudication. 

Is there anything else I can do? Yes. Contempt is usually a last resort and in California there are other methods of child support enforcement. For example, payments can be withheld from the paycheck of the parent who owes child support, the cost of the insurance may be deducted from the noncustodial parent’s paycheck, a property lien can be put on any personal property and real property, and tax returns can be used to pay past due support.  Additionally, if a parent is behind on child support, the Department of Motor Vehicles may refuse to issue or renew their driver’s license.   

To summarize, in order to pursue contempt for failure to pay child support you need to (1) have a valid order, (2) the other parent has to know about the order; (3) the other parent has to have failed to pay child support.  Just remember that inability to pay is a defense for contempt.  

You can contact me at amanda@gordonfamilylaw.com to learn more.