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SUDOKU
• Amounts deducted for health benefit premiums, if any • Amounts deducted for life insurance premiums, if any • Amounts deducted for Medicare premiums, if any • Amounts withheld for federal income tax purposes, if any • Amounts withheld for state income tax purposes, if any
Key Takeaway: Before you begin negotiating, know which calculation method best accomplishes your client’s goals. Here are some other tips to keep in mind.
• Net annuity is rarely used.
• Use gross annuity if you want each party to pay a portion of the survivor annuity premium.
• Use self-only annuity if no survivor annuity is awarded to the former spouse.
We set a hearing on our request for entry of the QDRO and appeared on behalf of Pamela at the hearing. Pamela was not required to attend. The judge signed the QDRO and the original was filed with the district clerk. Afterward, we obtained a certified copy of the QDRO from the district clerk and mailed it to the plan administrator for approval. Approximately five weeks later, the plan administrator sent Pamela a letter approving the QDRO and explaining her rights to distribution of the funds when her ex-husband retired or turned 65. The Results Pamela Bishop was properly placed in a legal position to receive a monthly benefit from her ex-husband’s pension for the rest of her life. If Pamela waits until her ex-husband turns 65, it is estimated she will receive $1,278 per month. We considered the idea of approaching Pamela’s divorce lawyer. In the end, we decided not to. He should have prepared and submitted the QDRO to the plan administrator at the time of divorce. His failure to do so meets the classic definition of professional negligence. However, Pamela did not suffer significant financial damages as a result of her attorney’s negligence. Her husband has not yet retired and was not aged 65 at the time of the filing. Since Pamela is not entitled to receive any monthly benefits yet, she has not missed any. Pamela’s total cost for fixing her QDRO problemwas $1,500 plus court costs for filing the petition and having her ex-husband served. That’s only a little more than one monthly benefit she will receive. Want to learn more? We are building the world’s largest FREE keyword-searchable knowledge database dedicated to QDROs and dividing retirement in divorce. This database is full of information and tips just like these. Simply point your web browser to HernsbergerLawFirm.com to begin your search today. –Judge Stephen Hernsberger • Use self-only annuity if you want the former spouse to pay 100 percent of the survivor annuity premium AND state that the amount of reduction of the employee annuity necessary to provide the survivor annuity premium should be taken entirely from the former spouse’s award.
Be Inspired
Hernsberger Law fixed the divorce attorney’s mistake before Pamela suffered any damages. That’s good for Pamela and her divorce lawyer (and he never knew).
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