 Her cell phone was glued to her ear when I first noticed her.
“I don’t know what to do! . . . Find out! . . . Call someone! . . .” Finally, she gave up with a sigh, “Do the best you can. I’ll be back in the office on Friday.” I wasn’t eavesdropping. She was no more than five feet away. And everyone within fifty feet heard her. We were stranded in a sea of divorce lawyers. I didn’t count them, but there were at least five hundred of us outside that meeting room. Maybe more. The lobby was clearly designed for no more than three hundred. Oxygen was sparse. Good cheer even sparser. We were plowing through day three of a four day seminar and we all needed coffee at the mid-morning break.  Imagine the look on Judge Anthony Conrad Bellchamp's face at his retirement party.
His wife of fifteen years pulled him aside. "Judith [... Judge Bellchamp's ex-wife] called. She sends her regrets that she can't attend the retirement party. She also wanted to tell you that she applied for your TCDRS* retirement. It's a nightmare. But you're not dreaming. "She said she gets it all. Is that true? "Wait. There's more. She said she gets all of the ERS** retirement, too. And, apparently, you named her irrevocable beneficiary for every penny in both retirements. "What are we going to do?"  Pamela Bishop divorced a tormented, physically abusive husband. Now, she and her children are safe. That's a good thing.
Her San Antonio divorce lawyer convinced the Judge to award her 60% of her husband's pension. She slept better at night knowing there would be a little security when she hit retirement age. He never prepared a QDRO for the pension! Or so she thought. Sadly, Pamela was never going to see that money. Her lawyer closed his file when the Judge signed the Decree. He never prepared the pension QDRO. Malpractice for the lawyer . . . Financial ruin for Pamela . . .  When you don’t do the QDRO, your client doesn’t get her money.
When your client doesn’t get her money, her ex-husband empties the account. When your client’s ex-husband empties the account, she sues you. When your client sues you, you lose everything. When you lose everything, your wife runs off with your best friend. My, how you miss him. Don’t lose your best friend. Do the QDRO.  A QDRO is much more than a document . . . It's a process.
If you prepare a QDRO but don't walk it through the 4 steps of the approval process, you might as well not prepare the QDRO at all. Neither approach will work. It doesn't matter whether you're a lawyer working on the closing documents after a divorce or you're a non-lawyer trying to do your own QDRO, you must take these 4 steps to reach the finish line.
We maintain a very large library of retirement plan documents, summary plan descriptions, QDRO approval processes, and model QDROs for thousands of retirement plans. And the library grows daily.  The Judge awarded Amy Palmer $35,167 from her husband's 401K at Hewlett Packard. Amy, a now-single mother of three really needed the money, and she needed it quickly.
Amy's Dallas divorce lawyer waited for six months to send the 401K QDRO to HP for approval. (See our discussion of the QDRO Approval Process). He should have sent it the same day the QDRO was signed. Surprise . . . Surprise . . . Surprise . . . Imagine everyone's surprise when the Plan Administrator rejected the QDRO because there was no money in the account! Amy's lawyer sent the QDRO to HP in six months. Amy's ex-husband emptied the account much more quickly. |