Non-Employee Spouse is Entitled to Proportional Marital Share of COLAs
Non-Employee Spouse is Entitled to Proportional Marital Share of COLAs

Brown v. Brown, NO. 2013-CA-001515-MR (Ky. App. 2015)
When a Decree Utilizes the Deferred Distribution Method (via QDRO or Similar Court Order), Post-Retirement Cost-of-Living Adjustments (COLAs) to the “Marital Portion” of a Pension are Subject to Equitable Division

Rendered: January 16, 2015
To Be Published
Opinion Affirming

I will not hide my enthusiasm for the Kentucky Court of Appeals’ recent opinion in Brown. Anyone who has ever utilized my services, or heard me speak at a CLE or other event, knows exactly where I stand on this issue. COLAs are a ‘negotiable’ marital asset in divorce, just like any other marital asset.  Meaning, if you have not negotiated the distribution of COLAs in a divorce or dissolution action, you have not fully divided the pension.

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2015Eileen ZellKY, Kentucky, COLA, QDRO, KTRS, KERS
EZ QDRO LAW Year in Review: Top Five ‘Local’ QDRO Blunders to Leave Behind in 2014
EZ QDRO LAW Year in Review: Top Five ‘Local’ QDRO Blunders to Leave Behind in 2014

My Look Back at This Year's Most Common QDRO-Related Mishaps

Happy New Year! I thank each and every one of you for another wonderful year here at EZ QDRO LAW. I can only imagine what 2015 holds for us... you, me, and QDROs. (Blissful sigh).

BUT, since we still have a precious few hours of 2014 left, just like every other self-proclaimed Blogger, I cannot resist the opportunity to reminisce -- or as some may see it -- beat a dead QDRO horse. (I assure my readership, no horses were hurt for this post, only poor innocent QDROs.)

It is clear that many of the QDRO-related problems I have been presented with this year are geographically linked. Other problems that I’ve seen crop up are more universal in nature. In either case, I promise dear reader, there is not a single issue below that I have seen only once, twice, or three (plus) times this year. Most important is that these issues are local, in that they have rattled (even the most seasoned) practitioners right here in Kentucky and Ohio. So if you recognize yourself in this post, you are amongst friends and good company.

Now let's band together and put my Top Five to rest in 2014, along with the proliferation of creepy-vans-turned-food-trucks on Fountain Square, Kim Kardashian’s photos of you-know-what and Ellen DeGeneres’ Oscar photo tweet “breaking the internet” (yes, I looked at the former), Pharrell's hat (Smokey Bear called...), Alex from Target, Grumpy Cat, and Dumb and Dumber To (sorry AR).

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2014Eileen ZellOH, Ohio, Kentucky, KY, QDRO, Avoiding Pitfalls, Coverture, KERS
QDRO Primer for Ohio Family Law Practitioners
QDRO Primer for Ohio Family Law Practitioners

Saks v. Riga, 8th Dist. Cuyahoga No. 101091, 2014-Ohio-4930
Lions (Expert Witnesses), Tigers (Coverture), and Bears (Deferred Distribution), Oh My!

Released and Journalized: November 6, 2014
Judgment Affirmed in Part, Reversed in Part, and Remanded

Today’s feature case is just plain good ole’ domestic relations law fun. It hits on several pinnacle issues related to QDROs (or in this case rather, a Court Order Acceptable for Processing (COAP), which divides Federal Employees Retirement System (FERS) pensions). In fact, the issues are so well canvased that this Opinion makes a wonderful primer – or refresher course – for domestic relations attorneys practicing in Ohio.

For starters, both parties in this case were/are attorneys. So that may help explain the need for a 34 page Opinion. After trial, the magistrate divided the parties’ marital property, and ordered Husband to pay monthly child and spousal support and one-half of Wife’s attorney fees. Both parties filed objections to the magistrate’s decision; the trial court overruled all of the objections and adopted the magistrate’s decision except for a few limited modifications. Husband appealed, raising eleven assignments of error. Wife cross-appealed, raising one assignment of error.

I have broken down the relevant issues in Saks v. Riga in an index-like format below, for future quick reference. But I strongly encourage every attorney reading this blog (or just the two, thanks DP and GA) to read this Opinion in full. You know, with all your spare time.

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2014Eileen ZellOH, Ohio, Coverture, FERS, Expert
QDROs are an Attorney’s Best Friend: Tax Issues & Dividing Employee Retirement Benefits When There is No QDRO
QDROs are an Attorney’s Best Friend: Tax Issues & Dividing Employee Retirement Benefits When There is No QDRO

Kelly v. Kelly, NO. 2012-CA-001081-MR (Ky. App. 2014)
When There is No QDRO, Income Tax Liabilities and Reporting Obligations Must Be Negotiated, Allocated and Structured Between the Parties

Rendered: August 29, 2014
Not To Be Published
Opinion Reversing

To: Domestic Relations Attorneys on BOTH Sides of the River
Re: I’m Sorry, and You’re Welcome

Let me start by saying, if you hate QDROs, I wager that this post will help you see QDROs through a more affectionate lens….

To that end, qualified ERISA-based plans should be your preference when assigning retirement benefits to a former spouse. In fact, a red flag should go up whenever you encounter a plan that is not governed under ERISA. Importantly, non-ERISA plans are subject to their own set of rules that may limit or even prohibit the assignment of benefits to a former spouse. 

For attorneys in Ohio and Kentucky, there are certain retirement plans out there you should be on the lookout for that are “non-ERISA” and/or “non-qualified”.  THESE PLANS MAY NOT BE ABLE TO BE DIVIDED VIA QDRO OR SIMILAR COURT ORDER. For instance, if your client (or his/her spouse, or former spouse) has a retirement plan with the City of Cincinnati, listen up. City of Cincinnati pension benefits cannot be divided by QDRO. The same may be true if one of the parties is an executive with Procter & Gamble, or General Electric, to name only  a very few local employers with supplemental executive retirement plans. 

You are thinking, “What’s the big deal Eileen?” That is because you are ahead of the bell curve. You are one of the lucky who discovered pre-decree that you could not divide the pension via QDRO. You were able to instead negotiate an alternative equitable distribution of the pension; perhaps an offset with the parties’ much coveted rare, mint condition first edition Princess Diana Beanie Baby collection. You saved yourself and your client a lot of time, money, and heartache by not simply having the parties sign off on a property agreement “splitting the pension via QDRO”, only later to find out post-decree that the pension could not be divided via QDRO. I bet you were a ‘hand-raiser’ in law school too. As for the rest of us...

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2014Eileen ZellOhio, OH, Kentucky, KY, QDRO, Cincinnati, Tax, KERS
Show Me the Money: Tracing Pre-Marital Retirement Accounts in Kentucky and Ohio

Smith v. Smith, NO. 2011-CA-002306-MR (Ky. App. 2014)
Evidentiary Burden is on Employee to Prove Non-Marital Amounts to be Assigned as Separate Property Interest

Rendered: May 23, 2014
To Be Published
Opinion Affirming

Welcome readers.  This is the one-year anniversary of my inaugural blog post, and over this past year I am proud to say that I have picked up the unforced readership of at least one attorney.   You know who you are TM.  I won’t embarrass you.  But I truly thank you.

I have been otherwise blessed by the support of my family, friends, and colleagues, each of whom fight through their yawns and read this post with regularity because they know they will be tested at the next happy hour.  There are too many to count (friends, family, colleagues... and happy hours).  So you all will also escape the embarrassment of being named.  There are not words to express my appreciation for your patience and seemingly endless lists of suggested revisions (both solicited and unsolicited). 

Here’s to many more (blog posts... and happy hours).

***     ***     ***

This blog post analyzes the evidentiary burden of proving a non-marital separate property interest in a commingled defined contribution retirement account under state domestic relations law in both Kentucky and Ohio.  First, the holding in Smith is examined; then this post provides family law practitioners on both sides of the river with applicable law specific to each jurisdiction, as well as some practical guidance. 

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2014Eileen ZellKY, OH, QDRO, Tracing, Kentucky, Ohio
Valuing KTRS Pensions in Divorce: Where Do We Go From Here?

How Does the Family Law Practitioner Properly Advise a Client in Divorce When One Party Participates in KTRS?

This blog post is based upon a topic I have researched over the past year, and am continuing to explore with the intention of ultimately submitting something more formal for publication.  This post follows my general blogging trend.  I present a problem – for instance, in this case arising from legislative and judicial ambiguity – and then submit to my reader a possible solution to chew on.  It is a longer post than usual, and is not for the faint at heart.  Venture at your own risk...

Recently, in Eden v. Eden, No. 2012-CA-000819-MR (Ky. App. 2014), the Kentucky Court of Appeals considered the proper classification and division of a Kentucky Teachers’ Retirement System Pension (“KTRS Plan” or “KTRS Pension”) in divorce pursuant to the governing statutes and regulations (see my blog post dated March 25, 2014).   Although not directly at issue in Eden, because the participant was already retired and drawing his monthly retirement allowance, this author could not help but to be reminded of the uncertainty under state law when valuing, classifying, and dividing a KTRS pension in divorce.

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2014Eileen ZellKTRS, KY, QDRO, Kentucky, NPV, Coverture