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QDRO Should Be Signed At Same Time As Decree

Question: A final hearing has been set for my husband's and my divorce. We have been able to negotiate everything. I am to receive $100,000 from his 401k and a survivor annuity from his pension in addition to being the beneficiary of certain employer life insurance, but my lawyer tells me that the orders requiring the transfer of these funds and other benefits will not be ready in time for the final hearing because my husband's employer has not yet approved the form. He tells me it may take about three more months. My husband wants to remarry, has already set a date, and is in a hurry to get the divorce out of the way. I would like to have everything in place first. Am I wrong?

Answer: You are absolutely right. Allowing a divorce to become final before the qualified domestic relations order ("QDRO") is approved is a big mistake. As long as you are married, you are automatically the beneficiary of his qualified funds under federal law -- unless you have waived this right. However, once the marriage is terminated, you are totally unprotected between the time you are divorced and the date on which the QDRO is approved. If your husband dies, retires, or remarries during this time, you may get nothing.

Should your husband retire after the divorce, but before the QDRO is approved, he could choose to take his benefits in a single-life annuity and defeat your right to be the survivor beneficiary without notice to you because you would no longer be the automatic beneficiary.

Since you know your husband will remarry immediately, you may well run into problems claiming your rights to death benefits and your survivor annuity because there will be a question about whether your rights or his new wife's rights are superior under federal law.

If there is a rush to terminate the marriage, then the same rush should apply to completing the orders that will protect your economic future. Stick to your guns here.

Question: After two years of marriage and no children, I was badly injured in an accident at work which left me with only part of one hand. Due to extenuating circumstances, I became impotent, and my wife left me. Six weeks later, she sued me for divorce, claiming that she should receive a share of my settlement. My wife works and makes more than I did when I was working. My job opportunities are very limited. I have a lawyer who is helping me with my disability claim, but I have not hired a lawyer in the divorce because I can't afford it. I am now living with my parents. Can she get a part of my settlement?
Answer: In making these decisions, a few states categorize personal injury awards entirely as marital property, while the majority evaluate the nature and underlying reasons for the compensation.
The courts in the majority of states will generally consider 1) whether the funds paid are to compensate you for lost past earnings, loss of future earning capacity, or some other purpose; 2) the period of time during which your earning capacity will be reduced; (3) the nature of your injury; and (4) the terms attached to the funds awarded to you.
Since there is rarely one good answer that fits all facts, we believe that the better rule allows the Courts to look at the facts and make a decision, rather than throwing all personal injury awards into the pot. If you are to be compensated for injuries, disabilities, and losses which will extend beyond your divorce, the funds you receive should not be part of the marital estate. We urge you to retain an attorney who can assist you in the family court.

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