Finding Hidden Retirement Plans

Almost every divorce, whether the parties are low-net-worth or high-net-worth (HNW) individuals, involves dividing retirement assets.  Failing to divide these retirement assets properly can result in significant, unanticipated, irreversible, negative downstream financial impacts.  For this reason, most family law attorneys hire outside “QDRO counsel” to draft qualified domestic relations orders for their clients. This is a very specialized area of law that requires technical precision and more than a passing knowledge of this area of law. In addition, hiring  and attorney who specializes in crafting QDRO’s is considerably less expensive than attempting to draft these orders in-house.

Retirement assets are classified as either qualified or non-qualified. Retirement plans that comply with the requirements and parameters of the federal Employee Retirement Income Security Act (ERISA) are considered qualified plans.  Retirement plans that do not comport with ERISA are non-qualified plans. Some examples of non-qualified plans are individual retirement accounts (IRAs), stock option plans, deferred compensation plans, supplemental pension plans, and long-term incentive plans. ERISA-qualified plans include such plans as defined benefit plans (i.e., 401(k) plans), defined contribution plans, and many pension plans. The vast majority of all retirement plans are qualified plans.

Non-qualified plans are divided by creating a constructive trust. Essentially, the spouse in whose name the non-qualified plan is held, known as the participant spouse, is required, by court order, to hold the retirement account in trust for his or her spouse until such time as the retirement plan is eligible to be distributed to the spouse in whose name the non-qualified plan is held. Many, many pitfalls exist for the unwary and, for this reason, care must be taken in drafting these orders in such a way that an unscrupulous spouse cannot take advantage of the other spouse.

A few of the most common pitfalls made in dividing retirement assets are discussed in “Avoid Five Costly Mistakes in Dividing Retirement Assets During Divorce” by Connie H. Buffington, published at weathmanagement.com on February 1, 2016.  This article also discusses in simple, understandable terms the tax benefits associated with ERISA-qualified plans (e.g., monies placed into a qualified plan do not incur taxes until the funds are withdrawn, and the funds in the qualified plan grow tax free until withdrawn).

If you are a HNW individual who is divorcing and you suffer from the naive impression that dividing retirement plans is a simple matter, you owe it to yourself to  educate yourself. If you are an “alternate payee” spouse, which means you are the spouse seeking to demonstrate her interest in her spouse’s retirement plan(s), and your spouse is a HNW individual, your attorney has his work cut out for him.

Oftentimes employer’s will work with their key employees to hide key employee benefit plans. It is not unusual for corporations to create separate retirement plans and other employee benefit plans for key employees that have different plan administrators than those for non-key employees. Locating these plans and plan administrators can be extremely costly and time-consuming. While states like California have very strong disclosure and fiduciary duty requirements for divorcing couples, these protections are of little help if the participant spouse and his or her employer are motivated to hide one or more employee benefit plans. One of the best ways to discover the existence of a concealed employee benefit plan is to hire experienced QDRO counsel who may have uncovered a particular corporation’s key-employee retirement plan while working on another case.

In summary: (1) Ask your divorce attorney to retain an expert QDRO attorney for dividing any ERISA-qualified retirement plans; (2) Work with your divorce attorney in crafting effective orders for non-qualified retirement plans; (3) Work with the QDRO attorney in locating any concealed employee benefit plans; (4) Make sure your divorce attorney notifies opposing counsel of your spouse’s fiduciary duties and duty to disclose; and (5) Be prepared to expend significant funds on securing your rights and interests in the participant spouse’s secret employee retirement benefit plans.

Over the last 10 years, the internet has brought BPD into the open and exposed this previously unknown and misunderstood personality disorder.  Dozens, if not hundreds, of websites now exist that address BPD. Treatment centers, alternative modalities of treatment, support groups, blogs and other resources are available to those who suffer from BPD and to those who are in interpersonal relationships with a BPD.

While psychologists and psychiatrists struggle to find effective treatment modalities for BPDs, the chances of a person who suffers from borderline personality disorder “recovering” remains abysmally low.

Although it is beyond the scope of this blog to discuss how and why BPDs choose the partners they choose, the fact remains that most borderline relationships end in disaster, including divorce.

Few attorneys and even fewer judges understand borderline personality disorder. There is a dearth of divorce attorneys who understand that Borderline divorces must be handled differently from garden variety divorces. Critically, many judges fail to understand that until the psychological dynamics that are driving the Borderline conflict are identified and addressed, the divorce will resist resolution. This, in turn, will lead to never ending litigation which will eventually destroy the entire family financially and as a family unit. The courts are completely oblivious to the fact that, their golden intentions notwithstanding, when it comes to  Borderline divorces, they are destroying America one family at a time.

It is wonderful that society in general, and the mental health community in particular, is finally funding and providing the resources necessary to help those who suffer from Borderline Personality Disorder. Unfortunately, when all else fails and you realize you have been hitting your head against a brick wall for years and that you have no other choice but to divorce your Borderline spouse, you will find it nearly impossible to find an attorney with the skill, understanding, compassion, fortitude and experience necessary to successfully litigate a Borderline divorce. As far as I know, I am the only attorney in America whose practice is limited to litigating  Borderline divorces and to consulting nationally and internationally with divorce attorneys, their clients and health care professionals. Over the years, I have consulted with people in India, South Africa, Germany, Canada and France as well as with hundreds of people from 25 or more States. These consultations are personally very rewarding because I get to help many more people than I could ever help litigating cases in Los Angeles County.

If I can help, please call.

Complications arise because the animal has no voice of its own, and can’t say who it’s rightful owner is or with which party it would prefer to reside. The average pet owner rarely thinks about routinely updating documentation to prove their relationship with their pet, so pet custody battles tend to be based on one party’s word against the other.

Pets are not just property that can be divided equally between parties, so it is up to individual judges to choose the criteria for determining the rightful owner. Do they go by which party the pet appears to like more, which party it obeys? Does the animal go to the party who originally purchased or adopted it, or the person who plays with it, buys its food and takes it to the vet? If child custody is awarded to one parent in a divorce, does that parent have a better chance of getting the dog because of the children’s attachment? If one party clearly loves the pet more, but the other party has excess money to pay the animal’s steep veterinary bills, what then?

Take a look at a prime example of these dilemmas in this article about Stitch, a very popular French bulldog.

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Admittedly, virtual visitation helps people like deployed military personnel who have no control over their deployments and work locations keep in touch with their families back home. In some cases it is the only medium through which a very young child is able to know the removed parent at all. In such cases, virtual visitation orders allow non-custodial parents and children to have a “virtual relationship”, which is better than none at all.

The current euphoria over virtual visitation is illustrated by an online article entitled “Virtual Visitation Helps Maintain Strong Parent-Child Relationships”. Unfortunately, this article, which is a press release written by a family law firm soliciting business, cites no scientific evidence to support its position. In truth, virtual visitations do NOT help maintain strong parent-child relationships. Family law is plagued by unexamined fads (like Judith S. Wallerstein’s wholly discredited single, primary parent theory)–and families across the country continue to be destroyed by these dysfunctional notions about human nature. Virtual visitations stand to be the next great destroyer of the American family unless its use is reserved for cases in which face-to-face visitation is impossible.

Under what circumstances, then, should courts refuse to replace face-to-face visitations with virtual visitations? First of all, courts must acknowledge that at some point allowing children to watch television, play video games and otherwise stare at a screen is detrimental to children. Secondly, convenience, personal preference, interference with a child’s normal schedule, and similar excuses should never be accepted by a court as reasons for substituting virtual visitations for face-to-face visitations. This is true regardless of whether the custodial or non-custodial parent is requesting virtual visitation. Thirdly, virtual visitations should not be used by the custodial parent to purposely limit face-to-face time between the child and the non-custodial parent. Fourthly, in the eyes of a parent who might otherwise have been awarded actual physical visitation time, or a parent who’s ex-spouse already allows unlimited online interaction without a court mandate, an award of “virtual visitation” is effectively an award of no visitation.

More fundamentally, the word “visitation” itself connotes physical presence. Seeing an image of your parent or your child on a computer screen is not any different from looking at a photograph or home movie. The addition of sound allows the parties to interact and carry on a conversation–just like a phone. If talking on the phone to your child is not considered in-person visitation, and watching a movie of a child’s school play isn’t considered in-person visitation, then why would a video chat be considered a substitute for face-to-face, in-person visitations?

Beneath these obvious misuses of virtual visitation lies a deeper, far more subversive problem. This problem was first identified by Marshall McLuhan in 1964 and is discussed in an article on this site entitled “Is ‘Virtual Visitation’ Visitation?”.

Until a computer can simulate the feeling of a hug or a kiss goodnight, or replace a well-brushed baby tooth that is put under a child’s pillow, by definition, “virtual visitation” is not visitation. Ask any child.

Click here to read more on the subject in the article “Is ‘Virtual Visitation’ Visitation?”.

According to this March 19, 2012 “Washington Post” article, if, during specific qualifying types of deployment, custody is temporarily granted to another person, upon the servicemember’s return, the court would be required to re-establish the custody arrangement as it was prior to deployment. Essentially, the court could not consider the servicemember’s deployment in determining what custody arrangement is in the best interests of the child.

Qualifying deployments would include such deployments as those that prohibit the accompaniment of family members (e.g., combat assignments)l Also, deployments must be between 60 days and 180 months in duration.

Why were the five year-old’s parents not told for two weeks that their son was handcuffed with zip ties?

Why weren’t the parents called as soon as the decision to transport this child to a psychiatric hospital was made? In 2012, do American parents retain any rights to act on behalf of their children or can the State take a minor child into custody at will in much the same way the State can take possession of your dog or cat?

Why did this elementary school principal feel it necessary to call the police in the first place? Did both he and the classroom teacher lack the skills necessary to deal with a five year-old boy who suffers from ADHD? If so, what are they doing working with children?

Bringing in a police officer to intimidate, frighten, traumatize and subdue by physical force a five year-old who suffers from ADHD shocks the conscience of anyone who has a clue about child development and age appropriate child discipline.

The school principal stated that he calls in the police as a way of scaring children into behaving. There are better, time-tested methods for disciplining elementary school children.

While using the threat of death (real or perceived), imprisonment or physical violence against a five-year old who refuses to conform and comply with authority may produce the desired conforming behavior, these forms of coercion typically also produce in children a profound disrespect for authority who frequently show resultant delays in normal child development.

Children traumatized by overwhelming feelings of helplessness and powerlessness oftentimes do not do well academically or socially. Displays of overwhelming force intended to crush young psyches into submission leave children with deep seated feelings that the world is not safe, that no one will protect them (least of all the police and people in positions of trust and authority), and that are unwanted because they are bad.

The article quotes Dr. Shannon Cannon, UC Davis Professor of Education, who politely stated: “I have been around young children that, when they can’t express themselves, and don’t feel they’re being heard . . . they really need to make a loud statement in some way and it’s often a very physical statement.” That’s right: if you kick a dog often enough, hard enough and long enough, eventually he will bite you. Michael Davis needed attention. When no one would give him the positive attention he craved, he resorted to seeking negative attention, which makes Michael a normal, smart boy.

Incredibly, the guilt of Michael’s teacher, principal and school district staff only came to light after Michael was dehumanized and, essentially, tortured. The school knew this five year-old suffered from ADHD and that his ADHD was a major contributor his behavioral problems, yet the school district repeatedly refused to give Michael the federally mandated special accommodations to which he and all special needs children are entitled.

As a result, taxpayers were forced to foot the bill when, according to the article, Michael was “forced” to undergo a psychiatric evaluation at a local hospital. The reader is not told if Michael’s psychiatric evaluation was performed voluntarily or if it was performed involuntarily as part of his false arrest and subsequent mandatory admission to a psychiatric hospital.

Who won this “battle of the wills”? Nobody. The five year-old lost. His parents, by failing to sue the school district, also failed to honor their duty to society to ensure this never happens again to any child in the U.S. Law enforcement suffered blows to its duty to “Protect and Serve” and the public trust. Taxpayers ended up paying a premium to have Michael Davis evaluated at a hospital rather than at school. Taxpayers also had to foot the court costs associated with the District Attorney filing wrongful charges against Michael Davis. This in turn denied access to people who desperately need access to the justice system. Taxpayers are also saddled with the salaries and pensions of multiple school district employees who participated in this fiasco. The list of losers goes on, but the biggest loser in this debacle is Liberty and the rule of law.

There are larger legal, political and social issues at play here. The court dismissed the charges brought against Michael. It is tragic that, of all of the governmental players involved, only the court showed proper regard for the rule of law. When will America’s law enforcement community regain its understanding that it only has discretion to follow the law and that it must stop confusing the power to act with the right to act?

Ironically, Lt. Gordo most likely succeeded in reinforcing in this five year-old ADHD boy the exact attitudes, beliefs and behaviors (e.g., disrespect for authority) Lt. Gordo was summoned to Michael’s school to discourage.

Isn’t abuse, regardless of who commits it, still abuse? Or do you believe that a law enforcement uniform somehow excuses the wearer from responsible, socially accepted norms of behavior?

Who at Safeway was fired?

greatly influences the outcome of the custody dispute.

For example, assume a child custody dispute arises between California and a foreign country that did not sign the Hague Convention. The first thing California must do is determine if, pursuant to the UCCJEA, California has subject matter jurisdiction over child custody. This is a critical question under this scenario because the California court is required to determine as a threshold question whether the foreign country has custody laws that “are in substantial conformity with the Uniform Child Custody Jurisdiction and Enforcement Act.” If they are not, the California court may elect not to apply the foreign country’s custody laws if its laws violate fundamental principals of human rights. Where the foreign country’s laws substantially conform to the Uniform Child Custody Jurisdiction and Enforcement Act and the California court determines that child custody jurisdiction properly lies in the foreign country, the California court is obligated to apply the foreign country’s laws. That is to say, once the threshold question of which country has jurisdiction is settled, the California court will proceed to make a child custody determination by applying either the Uniform Child Custody Jurisdiction and Enforcement Act or the foreign country’s custody laws, depending on which locus has jurisdiction.

As a practical matter, under the Uniform Child Custody Jurisdiction and Enforcement Act, the California court is required to consult telephonically on the record with the foreign court with both parties present before reaching its decision. This is not always a simple matter to arrange.

In the above scenario, the child’s physical whereabouts–whether in California or abroad–is not mentioned. This is because the physical location of the child is not relevant in determining jurisdiction. Once jurisdiction is asertained and the proper custody laws are applied, a custody determination is made. Note, however, enforcing the custody decision can be problematic.

Next, assume a child custody dispute arises between California and a foreign country that signed the Hague Convention. In this case the International Child Abduction Prevention Act applies if the child is under 16 years of age and is “wrongfully removed” (i.e., without the other parent’s consent) from his or her “habitual residence”. The International Child Abduction Prevention Act is not a designed or intended to determine the merits of a custody claim. Its sole purpose is to ensure that custody determinations are made in the country that was the child’s “habitual residence” before the abduction.

Under this scenario, one of two things happens. Either the California court determines that the foreign country has jurisdiction over the custody dispute in which case California relinquishes jurisdiction to the foreign country, or the California court determines that California is the “habitual residence” of the child and asserts jurisdiction over the custody dispute.

Even if California has jurisdiction, many challenges still face the parent who was deprived of custody. The dispossessed parent must still convince the California court that the child’s best interests would be served if the child were returned to the non-custodial parent. If successful, the non-custodial parent must then take that custody order and attempt to have it enforced in the foreign country where the abducting parent took the child. This can takes months and tens of thousands of dollars may be spent to secure the return of the child.

To add insult to injury, if too much time passes before the non-custodial parent secures physical custody of the child, a court could decide that the best interests of the child would best be served by allowing the child to stay with the abducting parent!

For these and many other reasons, it is essential that the dispossesed parent act quickly and decisively to effect the return of the abducted child. This can only be done by securing effective legal counsel as quickly as possible and by filing appropriate pleadings in both California and the foreign country.

In California, the better practice is to wait until the psychological/custody evaluation is competed and distributed to the respective attorneys and the court and then, if you believe the evaluator’s methodology is problematic, challenge it by either impeaching the evaluator or by hiring another evaluator to perform a “unilateral” evaluation and to critique the first evaluator’s work. (Some states like California allow parties obtain “unilateral” evaluations without a court order; other states require permission from the court.) A “unilateral” evaluator is an evaluator hired by

one of the parties rather than an evaluator appointed by the court. A court appointed evaluator is commonly referred to (in California) either as the “court-appointed evaluator” or the “Evidence Code §730 expert”. In California it is likely a court will continue a custody hearing or trial to give the challenging party an opportunity to depose the psychological/custody evaluator.

Deposing the opposing party or the opposing party’s collateral witnesses and then submitting their depositions to an evaluator during the evaluation is risky business. First, you are effectively telling an evaluator that you think he or she is incompetent. Second, it is arrogant for an attorney to tell a psychotherapist how to do his or her job. Do attorneys really believe an experienced evaluator is not capable of discovering far more about the psychological dynamics driving the discord in the relationship than the attorney is? Third, I sincerely doubt most evaluators bother reading 150-page depositions.

“Litigating” a psychological/custody evaluation is different from preparing for the evaluation. It is absolutely essential that you completely fill out and document each question of (what is commonly called) the “Custody Evaluation/History Questionnaire” that evaluators give each party at the beginning of the evaluation to fill out. What I have seen all to often is a party submitting an inadequate “Questionnaire” and then his or her attorney feels compelled to compensate for the client’s inadequate response by litigating every aspect of the evaluation process.

Once the custody evaluation is completed and distributed, nine times out of ten the parties will not challenge the court-appointed evaluator even if they do not like the evaluator’s recommendations. This is so for several reasons, time and expense being two major reasons. The third reason is that unless the evaluator’s methodology is seriously flawed, it is unlikely the court (depending on the court) is going to reject the evaluator’s findings and recommendations. Indeed, if the evaluation includes a psychological evaluation of one or both parties or their children, it is unlikely a court is going to second guess the psychologist’s findings. It is more likely the court will accept the psychological findings but reject some of the evaluator’s recommendations. This can happen when the case has been before the same court for a year or more and the court understands the psychological dynamics driving the conflict.

If after reading the evaluation you and your attorney feel serious flaws exist in the evaluator’s methodology, it’s time to impeach the evaluator. How to impeach a evaluator is a question for another day.