With the “deadbeat” parent population growing by leaps and bounds, a QDRO should now be considered your primary weapon of choice in obtaining these overdue assets for your client. Millions of custodial parents throughout the country are owed past-due child support, yet may not know about this very important use for QDROs.
When Congress created QDROs in 1984, it recognized and addressed the well-settled public policy concerns surrounding child support obligations of noncustodial parents. QDROs for obtaining past-due child support are an indispensable element of that public policy. A child support QDRO prepared after a couple’s divorce does not modify the terms of a previous judgment entry. It is merely an enforcement tool against a “deadbeat” parent.
If your client’s ex-husband participates in his company’s 401(k) plan, there may be a light at the end of the tunnel and the past-due child support arrearage could be in your client’s hands within a couple of months. Assume, for example, your client’s ex-husband has built up a child support arrearage of $5,000. You can submit a child support QDRO today that awards the alternate payee her full child support arrearage of $5,000. This is true even if the participant himself is not yet eligible for a distribution under the plan. Most companies will provide the alternate payee under a defined contribution plan with an immediate distribution once the QDRO is approved.
Child Support QDROs – Should be Your Primary Weapon of Choice
• Great Tool for Collection of Past-Due Child Support
• Can often receive immediate lump sum distribution upon approval of QDRO
• Can receive up to 100% of participant’s total vested account balance
• No limit on number of QDROs in a case
• Can specify either “former spouse” or “child” as alternate payee (a/p)
• Naming the “child” as a/p transfers tax liability to participant—where it should be
• QDRO Distribution can be made directly to State Support Enforcement Agency
