Utilizing a QDRO to Collect Back Support in High-Asset Divorces

 Posted on October 14, 2014 in High Asset Divorce

It is a frustrating reality of divorce, but many ex-spouses do not honor the terms of their high-asset divorce settlement, especially when it comes to child support and/or spousal support. After what can be months, or even years, of drawn-out, complex litigation, the support checks the obligor spouse is supposed to pay stop coming, sometimes before the ink is even dry on the divorce decree.

Trying to collect back alimony or child support funds from an ex who refuses to pay often involves even more litigation and more legal expenses. However, one tool that many high-asset divorce attorneys are beginning to utilize in order to assure their clients receive the assets they are entitled to is the Qualified Domestic Relations Order (QDRO).

In a high-asset divorce, a QDRO is used to ensure one spouse receives the awarded portion of the other spouse's retirement funds. The QDRO is a legal document that lets pension managers and financial institutions know that there is an alternative payee to a particular account. This assures that the spouse who was awarded a portion of the funds will receive them in the future.

When child and spousal support is calculated, it is usually based on the income of the obligor spouse. However, under federal law, if the spouse fails to pay support, funds from certain retirement accounts they have can be used to satisfy those obligations. If an ex-spouse is not paying his or her court-ordered support payments, a judge can order the back support be deducted from retirement accounts. In effect, the QDRO acts like a lien on these funds.

Ideally, the issue of non-support is one that is covered during high-asset divorce negotiations. One option is having a QDRO in place as part of the divorce settlement, in the event the paying spouse stops paying. There are very stringent regulations governing retirement accounts, as with many other issues in complex divorce negotiations, which is why it is critical to consult with a qualified Austin high-asset divorce attorney who understands the procedure that needs to be followed.