Using a QDRO to Pay Child Support Arrears After Participant’s Death

Qualified Domestic Relations Orders (QDROs) are used to divide certain retirement plans and award a portion of the funds to an alternate payee. QDROs are typically used as part of the distribution of assets and property in a divorce, and the alternate payee is typically a spouse or former spouse. However, there are other scenarios in which a QDRO may be used to give someone rights to a retirement plan as an alternate payee.

In the case of Trustees of Directors Guild of America Producer Pension Benefits Plans v. Tise, a QDRO was used to divide a pension plan in order to satisfy unpaid child support.

Background of the Case

Charles Myers, a director with a pension plan through the Directors Guild of America, died in 1995. Prior to his death, three parties claimed the proceeds of the pension plan: his designated beneficiary, Yvonne Curry; Suzanne Tise, who had an order for child support from Myers; and the IRS. Eventually, the IRS withdrew its claim, but Curry and Tise continued their dispute over the proceeds of the pension plan.

The basis for Tise’s claim to the pension was a child support order that was entered in 1981. Myers did not pay support voluntarily, and Tise had only received around $11,500 in support during the time the order was in place. In 1991, an order was entered barring the Directors Guild from disbursing pension proceeds without notifying Tise’s attorney first.

In 1994, Tise was notified that the IRS had also made a claim to the pension proceeds, and Tise sought a writ of execution against the plan for the arrearages owed by Myers, which totaled more than $200,000. The court ordered Tise’s writ of execution to be issued. After numerous hearings were held, the pension plan opposed Tise’s efforts and stated she was ineligible to obtain a Qualified Domestic Relations Order for the proceeds.

District Court’s Decision

When Myers died in 1995, the death benefit of his pension plan became payable to his designated beneficiary, Curry. There were at that time three parties competing for the proceeds, so the plan filed a complaint asking the court to determine how the proceeds should be distributed. After numerous pleadings filed by the parties, Tise received an order that stated she had the right to receive child support arrears from the pension plan benefits. The Marin County Superior Court determined that Tise was entitled to receive $326,438.85 in arrears and attorney fees.

The district court ruled that the proceeds would be divided between Tise, Curry, and the plan, with Tise receiving the amount awarded to her by the Superior Court. The plan received $3,000 in attorney’s fees, and Curry was awarded the balance of the proceeds, which equaled $39,335.69. The plan and Curry appealed.

What Orders Can Satisfy the Requirements of a QDRO?

In this case, the U.S. Court of Appeals determined that the 1994 writ of execution was a domestic relations order and recognized Tise’s right to receive benefits from Myers’ pension plan. The only further action required from Tise at that point was to obtain a QDRO that met the statutory requirements. It was the plan’s responsibility to determine whether the 1994 order was a QDRO and allow Tise to secure one if necessary, which is what she was attempting to do when Myers passed away. Additionally, Tise notified the plan that she had an interest in Myers’ pension proceeds prior to his death, so the fact that the QDRO was not in place before he passed is irrelevant to this issue.

The appellate court affirmed the lower court’s decision to distribute $323,438.85 of the benefits to Tise. Navigating the complexities of pensions and retirement benefits can be cumbersome. For clarity, and to get the benefits to which you are entitled, consult with the knowledgeable team at Woodruff Family Law Group.