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Ex-husband’s retirement account could be used to pay support arrearages

Under Colorado law, a spouse may receive a portion of the other spouse’s retirement account as part of the divorce proceedings. But what about after the divorce? Could a spouse pursue the other spouse’s retirement fund to pay, for example, money owed for child support or maintenance payments?

The Colorado Court of Appeals answered this question in the case of In re Marriage of Drexler and Bruce.

Support arrearages pile up

The husband was a tax attorney and partner at a large law firm. After divorce proceedings, the husband was ordered to pay his wife $5,000 per month in child support and $12,000 per month in maintenance for a period of four years. Then, for the following two years, the husband was obligated to pay $8,000 per month. The husband did not meet this obligation and his support obligation arrearages amounted to more than $100,000.

The wife brought an action to collect the owed money from the husband’s retirement account-an Employee Retirement Income Security Act or “ERISA” retirement plan at the husband’s law firm.

The husband opposed this action, arguing that both Colorado and federal law protected his retirement fund and prohibited using the account to pay the support arrearages.

A “Qualified Domestic Relations Order”

The ERISA law was enacted to protect private retirement plan participants and, generally, the law prohibits assignment of retirement plan funds. However, such provisions do not apply where the funds are assigned to a former spouse under a “Qualified Domestic Relations Order” or QDRO. A QDRO allows a former spouse to receive all or a portion of the benefits in such a retirement plan.

A QDRO’s application is not limited to the actual division of property during a divorce, but can also apply to enforce maintenance and child support obligations. Here, the court entered a QDRO specifically to meet the husband’s unpaid child support and maintenance arrearages. Although the husband argued that a particular Colorado law should still protect his retirement fund, that law was “preempted”-or prevented from taking effect-by the federal ERISA law.

As the court noted, society places a higher value on the timely payment of maintenance and child support than on the future payment of pension benefits, and, thus, under the law, the support arrearages could be taken from the husband’s retirement fund.

Defending your interests

Whether you are seeking child support and maintenance, or trying to defend against an unreasonable support order, you need an attorney who will aggressively protect your interests. Seek an attorney who will help you through the legal proceedings while also working to reach an agreement that meets your needs.