Too many pieces of the financial pie
In a recent 2008 decision from the Fifth Circuit Court of Appeals (which handles federal appeals out of Mississippi as well as Texas and Louisiana), the need for a properly drafted QDRO in a divorce was stressed. This case illustrates the problem of not complying with ERISA in drafting a QDRO. Seemingly, one attorney thought a court order was sufficient, while the Fifth Circuit reminded the attorney that ignoring the dictates of ERISA is at your own peril.
Taliaferro v. Goodyear Tire & Rubber Co.involved a man married and divorced twice. The husband, who worked for Goodyear Tire & Rubber, divorced his first wife. The divorce decree required the husband to pay child support but he fell behind. In 2001, his first ex-wife took him to court to collect the child support arrearages. The state district court granted the ex-wife a right to collect the child support from his retirement account at Goodyear. The attorney sent a notice to Goodyear claiming an interest in the retirement account. In response, Goodyear told the attorney he needed to provide a Qualified Domestic Relations Order (QDRO) and supplied the attorney with the guidelines. (NOTE: QDROs can be used to collect child support.) However, the attorney never provided Goodyear with a QDRO. Rather, Goodyear received two additional state court orders directing it to withhold child support payments from the husband’s retirement account. Each time, Goodyear told the parties a properly drafted QDRO was required and each time this request was ignored.
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