Welcome to Executive Benefit Plans, Inc.

 
Main Link Column
Select this link Retirement Plans
Select this link Strategies
Select this link Employee Benefits
Select this link Individual Benefits
Select this link Participant Info
Select this link White Papers
Select this link Consulting Service
Select this link Proposal Request
Select this link Administration
Select this link Contact
Select this link News
Select this link Blog
Select this link Home
 

Potential Claims Against Your Benefit (Divorce)

In general, your retirement plan is safe from claims by other people. Creditors to whom you owe money cannot make a claim against funds that you have in a retirement plan. For example, if you leave your employer and transfer your 401(k) account into an individual retirement account (IRA), creditors generally cannot get access to those IRA funds even if you declare bankruptcy.

Federal law does make an exception for family support and the division of property at divorce. A state court can award part or all of a participant's retirement benefit to the spouse, former spouse, child, or other dependent. The recipient named in the order is called the alternate payee. The court issues a specific court order, called a domestic relations order, which can be in the form of a state court judgment, decree or order, or court approval of a property settlement agreement. The order must relate to child support, alimony, or marital property rights, and must be made under state domestic relations law. The plan administrator determines if the order is a qualified domestic relations order (QDRO) under the plan’s procedures and then notifies the participant and the alternate payee. If the participant is still employed, a QDRO can require payment to the alternate payee to begin on or after the participant’s earliest possible retirement age available under the plan. These rules apply to both defined benefit and defined contribution plans. For additional information, see EBSA’s publication, QDROs – The Division of Pensions Through Qualified Domestic Relations Orders, available by calling toll free at 1.866.444.EBSA (3272) or on the Web site at www.dol.gov/ebsa.

Action Items

  • If you are involved in a divorce, you should discuss these issues with your plan administrator and your attorney.

Source: U.S. Department of Labor

Topical Articles of Interest:

Charts  |  Contact Us  |  Proposal Request

 

 

Participant Information

Select this link Overview

Select this link Types Of Plans

Select this link Retirement Benefits

Select this link Plan Information

Select this link Payment Of Benefits

Select this link Your Money

Select this link Filing A Claim

Select this link Plan Fiduciaries

Select this link Plan Termination

Select this link Potential Claims

Select this link Glossary

Select this link Charts

 

 

 

Information is provided for review and consideration only. Please consult legal and tax advisors for practical advice pertaining to your business and personal situations.

This page was last reviewed and/or updated on Friday, August 13, 2010 10:46 AM

 
Privacy Statement - Executive Benefit Plans, Inc. Copyright 1996 - 2009 All Rights Reserved - Legal Statement
Website Powered by UHSystems