The parties were married in divorced in 2003. As a part of the divorce agreement the wife was awarded a percentage of the husband's retirement account. The agreement was silent as to whom was supposed to file and prepare the paperwork in order to divide those assets. The wife waited a number of years before she tried to transfer the funds into her name. Does this case sound familiar to you? That is exactly what happened in the case at hand.
In the case of Nord vs. Nord from Tuscaloosa County, Alabama, the parties were divorced in 2003. Pursuant to the divorce judgment, the wife was awarded 50% of the husbands 401(K) account valued at the date of the judgment. The trial court made a factual finding in the judgment that at the time of divorce, the former husband's 401(K) had a value of $62,000 in 2003.
The former wife filed a complaint asserting that neither party had prepared a Qualified Domestic Relations Order, QDRO, and that the plan administrator had contacted her and offered her $31,000. The wife argued that the language of the divorce judgment was ambiguous and that she should be awarded the half the sum from the former husband’s retirement account which reflected the prorated appreciation value.
The former wife determined her accumulated value in the amount of $81,783. After the ex-husband's post judgment motion was denied, the husband appealed and the appellate court affirmed the trial court's decision.
The former husband claimed he had taken his divorce decree to his employer’s personnel office and instructed them to put $31,000 awarded to the former wife in a low risk account. The ex-husband believed that the former wife’s share of the $31,000 would have been paid by him even at the market went down.
The former wife presented her own expert testimony who testified and explained that a money money market account is a very low risk investment that essentially keeps pace with inflation and rarely earns a positive rate of return. According to the expert, if the former wife invested the $31,000 in an S&P 500 index fund the value as of September 2019 would have been approximately $137,486. The expert further stated that the S&P index fund would be appropriate for an average risk investor and that a money market account would be appropriate for a zero risk investor.
The former husband had his own expert testimony provided by a certified public accountant. The CPA performed a calculation based on the actual returns of all the funds held by the former husband in his 401(K) and returned a balance of $81,783 as of September 2019. That amount was based on the $31,000 would be worth after taking all of the funds the former husband had invested considering the beginning values and returns made.
The former husband argued that because he had not accumulated funds in his retirement account for 10 years during the party's marriage, the trial court lacked subject matter jurisdiction to award the former wife any portion of his retirement account and thus he argued the former wife lacked standing to enforce that aspect of the divorce the divorce judgment.
The former husband next argued that because he placed the money in a money market account and according to his expert the interest earned on that amount would have only resulted in any award in the former wife of $39,442 the trial court erred by awarding her $81,783. Prior case law establishes that when a divorce judgment awards a spouse a percentage of a variable asset and the award is silent with respect to market fluctuations in the value of the asset before the time of distribution the judgment is inherently ambiguous.
The appellate court decided, if the spouses are equally responsible for the delay in the distribution as in this case, each party assumes a proportionate share of the subsequent gains or losses in the asset until such time as the share is distributed. The trial court denied not assign fault to either party with regard to delay in filing of the QDRO.
If you are seeking an award of retirement accounts from a divorce, contact Ingram Law LLC and let us help you receive what you are entitled to at 205-335-3640.