SUDOKU
Plug the Hole
It’s rarely a good idea to leave money on the table.
Some 401(k) plan administrators charge an administration fee for processing a QDRO. The fee is usually between $300–$500. But be careful. Under some circumstances, Fidelity charges as much as $1,500 to process a QDRO. The smart negotiator knows this: Who pays the plan administration fee, if there is one, is as negotiable as every other term of the division. Most 401(k) plans that charge a fee will allow the parties to allocate the fee entirely to either party or equally to both parties.
Train yourself to spot this potential gain or loss for your client. “Attention to detail is the hallmark of a professional negotiator.”
We’ve observed that most attorneys ignore this money leak when they negotiate the division of a 401(k). They fight like crazy over who gets the earnings or what the valuation date will be, but completely ignore who will pay the plan administration fee if there is one. Or worse, they don’t know if the 401(k) plan even charges an administration fee.
Be Inspired
Don’t put money in your client’s bucket and let it leak out of a hole that you forgot to plug.
We decided that Judge Bellchamp had the most leverage with TCDRS because they had blatantly violated state law and financially injured Judge Bellchamp.
We prepared to initiate administrative proceedings against TCDRS. However, TCDRS asked us to work with them towards a nonlitigious resolution. We began negotiating with TCDRS before filing any documents. Because any agreement Judge Bellchamp and TCDRS came to would require the involvement of Judge Bellchamp’s former wife as well as his current wife, TCDRS opened the negotiations to all affected parties, which became quite arduous and extensive. The Result We negotiated a comprehensive agreement on behalf of Judge Bellchamp. He retained full ownership of all retirement earned after the divorce from his former wife. He also retained the exclusive right to select whichever retirement distribution option he preferred and to name his present wife as the beneficiary of the retirement he owns as well as the retirement his ex-wife received in the divorce. Judge Bellchamp’s legal fees were substantial, as they reflected the large volume of legal research and extended, multi-party negotiation that was necessary to achieve the desired result.
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