Our Firm’s Flat-Fee Price List

Qualified And Nonqualified Plans $700 (as of August 1st, 2020)

• Orders

Qualified Retirement Plans are defined by Internal Revenue Code Section (IRC) 401(a). Pursuant to (IRC) 401(a), there are 37 requirements for a plan to be considered a “qualified” plan.  Some of the more well-known types of qualified retirement plans that you will come across in your practice are defined contribution plans such as 401(k) and 403(b) accounts, cash-balance plans (which are hybrids between a defined contribution and a pension plan) and conventional pension plans.

• 401(k), 403(b), 457(b)
• Profit-sharing plans
• Money purchase plans
• TIAA/CREF
• Cash balance plans
• Defined benefit plans (pensions)
• Employee stock ownership plans

• Nonqualified Plans

If you see the following names in a plan you are probably dealing with a nonqualified plan:

• Supplemental, SERP, Nonqualified, Excess Benefit Plans – Hourly rate

Federal Domestic Orders $700 (as of August 1st, 2020)

• Federal pension plans under the civil service retirement system (CSRS) and federal employee retirement system (FERS)
• Thrift savings plans (TSP) $700

Military Orders $1000

These types of retirement plans are not subject to ERISA, so assignment of benefits is dictated by federal regulations. In fact, effective at the end of 2016, Congress greatly altered what the military pay center (the Defense Finance and Accounting Service, or “DFAS”) will consider “disposable retired pay” for division of military retired pay between spouses.

• Military retired pay $1000

Railroad Pensions $1000

IRAs Hourly Rate

• Current Hourly Rate Is $325 An Hour

STATE PLANS/QILDROs (State Public Pensions) $750

State plans are controlled by the state legislature, here in Illinois 40/ILCS of the Illinois Pension Code.

• State, municipal and local pension plans

*Not all plans are listed, this is just a sampling. Contact me if there’s something not listed that you need pricing on.

QDROs

What Is A QDRO?

To be recognized as a QDRO, an order must be a “domestic relations order.” A domestic relations order or divorce mediation is: a judgment, decree or order (including the approval of a property settlement) that is made pursuant to state domestic relations law (including community property law) and relates to the provision of child support, alimony payments or marital property rights for the benefit of a spouse, former spouse, child or another dependent of a participant.

A state authority, generally a court, must actually issue a judgment, order or decree or otherwise formally approve a property settlement agreement before it can be a “domestic relations order” under ERISA. The mere fact that a property settlement is agreed to and signed by the parties will not, in and of itself, cause the agreement to be a domestic relations order. Proficient Divorce lawyer in Illinois representing the cases gather all evidence to ensure that the division is reliable and contingent.

A domestic relations order can be a QDRO only if it creates or recognizes the existence of an alternate payee’s right to receive or assigns to an alternate payee the right to receive, all or a part of a participant’s benefits. For purposes of the QDRO, an alternate payee cannot be anyone other than a spouse, former spouse, child or another dependent of a participant. Having a divorce attorney near me involved in it makes it easy to reach on the desirable outcome.

What Is A Qualified Retirement Plan?

Qualified Retirement Plans are defined by Internal Revenue Code Section (IRC) 401(a). Pursuant to (IRC) 401(a), there are 37 requirements for a plan to be considered a “qualified” plan. Some of the more well-known types of qualified retirement plans are defined contribution plans such as 401(k) and 403(b) accounts, cash-balance plans (which are hybrids between a defined contribution and a pension plan), and conventional pension plans. It is important to point out one of the most important characteristics of a qualified plan, which is that the monies held in trust by the retirement plan may not be alienated from the plan to pay any of the individual’s creditor’s or the employer’s creditors. This is because the public policy behind a qualified plan is to secure money for retirement and thus, said money should not be subject to alienation. An important reminder an Individual Retirement Account (IRA) is not a qualified plan, and thus is not subject to a Domestic Relation Order in Highland Park. In fact, since an IRA is a custodial account, all that is required for assignment is a letter of direction or in most cases some paperwork provided by the custodian. In drafting the letter of direction, you must have the following language “This transfer of funds shall occur in accordance with section 408(d)(6) of the Internal Revenue Code, with the rollover of funds being effectuated as a transfer between divorced spouses.”

Normally, money in a qualified plan is protected from alienation. The idea being that one typically cannot assign retirement money to another or take distributions until retirement age. The IRC does allow for a special exception though in the incident of divorce under 414(p). This important distribution exception that the IRC allows for stems from a knowledge that one party may not have had the ability to accumulate retirement during the marriage, this was obviously more prevalent when one parent traditionally stayed at home to raise children.

In fact, all qualified plans must distribute appropriate benefits to an ex-spouse upon divorce from a plan participant, but only if the parties provide a valid QDRO:

• The benefits of a QDRO can only be alienated if the domestic relations order is determined, by the plan administrator to be a QDRO. Such cases are handled by a divorce lawyer who peeks deep into all possibilities to let their client get the best benefits from the same. They not only represent the client but also proceed for it lawfully to let it decipher all intricacies.
• The QDRO must provide clear instructions to the plan administrator on how and when to pay the alternate payee (former spouse).
• Plans are required to have a QDRO determination procedure, which clearly informs all parties what they will look for in the DRO to determine if it is a QDRO, the time frame in which the administrator will make such a determination, and how either party can dispute the plan administrator’s determination in Chicago.
• If the plan administrator is on notice that a QDRO is forthcoming, then there is a statutory 18-month period where the plan administrator must act in good faith and segregate any benefits that might become distributable to an alternate payee should a valid QDRO be communicated.

For further guidelines as to what requirements determine a valid QDRO, see: https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/publications/qdros.pdf

Tax Consequences Of Assignment Of Qualified Plan Monies

Disclaimer… I am not a CPA…

The alternate payee’s share of benefits is typically considered taxable to the alternate payee and not to the participant (there are caveats to this – particularly with deferred compensation). Section 72(t) of the Internal Revenue Code provides an exception to the 10% tax penalty for retirement plan early withdrawals if the withdrawal is made pursuant to a QDRO, the lump-sum distribution will be taxed as ordinary income. If the retirement monies are immediately rolled over into an IRA or annuity vehicle that qualifies under the IRC, there will be no tax consequences to the alternate payee. The federal government has its own version of a 401(k) plan (TSP) and the same tax consequences would be applicable to the lump-sum distribution.

For more information concerning QDRO Resources, click here.