The IRS provides Sample Language for Spousal Consent Forms and Qualified Domestic Relations Orders
Janet Leach Richards, Cecil C. Humphreys Professor of Law, University of Memphis
Pending Legislation
compiled by Amy Amundsen & Jean Crowe
From the Chair
by Mary Frances Lyle
Stop Violence Against Women Grants
by Jean Crowe
Davidson County Courts’ Family Mediation Program
by Judge Marietta Shipley
The Secretary of the Treasury was required by Pub. L. No. 104-188, 1457, 1996 HR 3448, to develop, by January 1, 1997, sample language for QJSA and QPSA waivers, as well as sample clauses for use in Qualified Domestic Relations Orders. The notices are too long to reproduce in this newsletter. Attorneys are encouraged, however, to obtain full copies of the notices as they contain very valuable information in addition to the sample clauses, including question and answer sections and explanations of the statutory requirements for spousal consent forms and QDRO’s. The full text of the notices are available on WESTLAW and LEXIS and are published in 23 Family Law Reporter 2027.
The sample spousal consent clauses, which were published on December 30, 1996 (I.R.S. Notice 97-10, 1997-2 I.R.B. 1), are divided into four Appendices:
(1) Appendix A contains sample language that can be included in a spouse’s consent to a participant’s waiver of a QJSA [to be used for a defined benefit plan and for a defined contribution plan subject to section 404(a)(11)];
(2) Appendix B contains sample language that can be included in a spouse’s consent to a participant’s waiver of a QPSA, and, if the plan so provides, to the participant’s choice of a beneficiary other than the spouse to receive any survivor benefit [to be used for a defined benefit plan];
(3) Appendix C contains sample language that can be included in a spouse’s consent to a participant’s waiver of a QPSA, and, if the plan so provides, to the participant’s choice of a beneficiary other than the spouse to receive any survivor benefit [to be used for a defined contribution plan subject to section 404(a)(11)]; and
(4) Appendix D contains sample language that can be included in a spouse’s consent to a participant’s choice of a beneficiary other than the spouse for a participant’s account balance [to be used for a defined contribution plan not subject to section 404(a)(11)].
The IRS also released the following sample language (I.R.S. Notice 97-10, 1997-2 I.R.B. 1) to be used in Qualified Domestic Relations Orders:
A. Sample Language for Identification of Participant and Alternate Payee
The “Participant” is (insert name of Participant). The Participant’s address is (insert Participant’s address). The Participant’s social security number is (insert Participant’s social security number).
The “Alternate Payee” is (insert name of Alternate Payee). The Alternate Payee’s address is (insert Alternate Payee’s address). The Alternate Payee’s social security number is (insert Alternate Payee’s social security number). The Alternate Payee is the (describe the Alternate Payee’s relationship to Participant) of the Participant.
B. Sample Language for Identification of Retirement Plan
This order applies to benefits under the (insert formal name of retirement plan) (“Plan”).
C. Amount of Benefits to be Paid to Alternate Payee
Instruction: The QDRO should clearly specify the amount or percentage of benefits assigned to the Alternate Payee or the manner in which the amount or percentage is to be determined, and the number of payments or period to which the Order applies. There are many different forms in which benefits may be paid from a qualified plan. Because of the diversity of factors that should be considered, and the need to tailor the assignment of benefits under a QDRO to meet the needs of the parties involved, specific sample language regarding the assignment of benefits has not been provided.
D. Sample Language for Form and Commencement of Payment to Alternate Payee
Instruction: Drafters using the separate interest approach may use paragraph 1. Drafters using the shared payment approach may use paragraph 2. Drafters using the separate interest approach for a portion of the benefits allocated to the alternate payee and the shared payment approach for the remainder should modify the sample language to specify the benefits to which each paragraph provided below applies.
1. SEPARATE INTEREST APPROACH
The Alternate Payee may elect to receive payment from the Plan of the benefits assigned to the Alternate Payee under this Order in any form in which such benefits may be paid under the Plan to the Participant (other than in the form of a joint and survivor annuity with respect to the Alternate Payee and his or her subsequent spouse), but only if the form elected complies with the minimum distribution requirements of section 401(a)(9) of the Internal Revenue Code. Payments to the Alternate Payee pursuant to this Order shall commence on any date elected by the Alternate Payee (and such election shall be made in accordance with the terms of the Plan), but not earlier than the Participant’s earliest retirement age (or such earlier date as allowed under the terms of the Plan), and not later than the earlier of (A) the date the Participant would be required to commence benefits under the terms of the Plan or (B) the latest date permitted by section 401(a)(9) of the Internal Revenue Code. For purposes of this Order, the Participant’s earliest retirement age shall be the earlier of (i) the date on which the participant is entitled to a distribution under the Plan, or (ii) the later of (I) the date the Participant attains age 50, or (II) the earliest date on which the Participant could begin receiving benefits under the plan if the Participant separated from service.
2. SHARED PAYMENT APPROACH
The Alternate Payee shall receive payments from the Plan of the benefits assigned to the Alternate Payee under this Order (including payments attributable to the period in which the issue of whether this Order is a qualified domestic relations order is being determined) commencing as soon as practicable after this Order has been determined to be a qualified domestic relations order or, if later, on the date the Participant commences receiving benefit payments from the Plan. Payment to the Alternate Payee shall cease on the earlier of: (insert date or future event, such as the Alternate Payee’s remarriage), or the date that payments from the Plan with respect to the Participant cease.
E. Sample Language for Treatment of Former Spouse as Participant’s Spouse
Instruction: The Alternate Payee may be treated as the Participant’s spouse only if the Alternate Payee is the Participant’s spouse or former spouse, and not if the Alternate Payee is a child or other dependent of the Participant. If the Alternate Payee is the Participant’s spouse or former spouse, drafters may select sample paragraph 1, sample paragraph 2, or sample paragraph 3. Sample paragraph 1 applies if the Alternate Payee is treated as the Participant’s spouse for all of the spousal survivor benefits payable with respect to the Participant’s benefits under the Plan. Sample paragraph 2 applies if the Alternate Payee is treated as the Participant’s spouse for a portion of the spousal survivor benefits payable with respect to the Participant’s benefits under the Plan. Sample paragraph 3 applies if the Alternate payee is not treated as the Participant’s spouse for any of the spousal survivor benefits payable with respect to the Participant’s benefits under the Plan.
1. ALTERNATE PAYEE TREATED AS SPOUSE FOR ALL SPOUSAL SURVIVOR BENEFIT
The Alternate Payee shall be treated as the Participant’s spouse under the Plan for purposes of sections 401(a)(11) and 417 of the Code.
2. ALTERNATE PAYEE TREATED AS SPOUSE FOR A PORTION OF THE SPOUSAL SURVIVOR BENEFITS
The Alternate Payee shall be treated as the Participant’s spouse under the Plan for purposes of sections 401(a)(11) and 417 of the Code with respect to (insert percentage of benefit or a formula, such as a formula describing the benefit earned under the plan during marriage).
3. ALTERNATE PAYEE NOT TREATED AS SPOUSE
The Alternate Payee shall not be treated as the Participant’s spouse under the Plan.
OTHER SOURCES OF INFORMATION
The notices also list the following additional sources of information:
The Pension Benefit Guaranty Corporation (“PBGC”) recently published a booklet entitled “Divorce Orders & PBGC,” which discusses the special QDRO rules that apply for plans that have been terminated and are trusteed by PBGC, and provides model QDROs for use with those plans. This publication may be obtained by calling PBGC’s Customer Service Center at 1-800-400-PBGC or electronically via the PBGC internet site at http://www.pbgc.gov.
Additional information on the rights of participants and spouses to plan benefits can be found in a two-booklet set published by the Service, entitled “Looking Out for #2.” These booklets discuss retirement benefit choices under a defined contribution or a defined benefit plan, and may be obtained by calling the Internal Revenue Service at
1-800-TAX-FORM, and asking for Publication 1565 (defined contribution plans) or Publication 1566 (defined benefit plans).
There are three bills before the legislators focusing on grounds. The first is SB 0950 sponsored by Senator Miller. It changes the words “irreconcilable differences” to “dual fault” and requires the parties of a dual fault divorce to stipulate by written agreement that both parties are at fault relative to the failure of the marriage. Another bill relating to grounds is sponsored by Senator Fowler (SB 0323) and by Representative Kernell (HB 0525). It redefines domestic abuse, specifies causes for legal separation, changes the language of “divorce from bed and board” to “legal separation” and provides for guardians ad litem for minor children of dissolved marriages. The third bill is SB 1238 sponsored by Senator Herron requiring a six month waiting period for a divorce or annulment for parties having unmarried children or children under eighteen residing in the same home as the parties.
With respect to visitation, there are a few bills on grandparent visitation. Senator Davis’ bill (SB 0375) and Representative Williams’ (HB 1273) bill direct the Court to consider in its determination of visitation rights the ongoing or prior relationship of the grandparents seeking visitation with the minor child. The second bill is sponsored by Senator Haynes (SB 1065) stating that the grandparents of a minor child may petition the Court for reasonable visitation rights if a sufficient relationship exists between grandparents and child. This bill defines “significant relationship.” The third bill is sponsored by Senator Crutchfield and Representative Turner (SB 1557 and HB 0752). It grants visitation rights to natural or legal parents of a deceased party of a minor child unless the court of jurisdiction finds that such rights would not be in the best interest of the child. Additionally, this bill sets visitation rights as at least one day and one night each month. Senator Ford and Representative DeBerry (SB 1554 and HB 1101) endorse a bill which grants certain rights to grandparents in child protection proceedings.
There is a bill sponsored by Senator Cohen and Representative McMillan (SB 0746 and HB 1062) requiring certain parental rights such as the right to unimpeded telephone conversations with the child at least twice per week and the right to send mail which the other parent shall not open or censor. A bill sponsored by Senator Cohen and Representative McMillan (SB 0745 and HB 1063) clarifies that the gender of the party seeking custody of the child does not constitute factor relative to party’s fitness to parent.
Senator Person’s bill on orders of protection (SB 1431) increases the number of persons who may seek orders of protection in domestic abuse cases including those who have dated or are in a dating relationship and minors.
With respect to alimony, Senator Gilbert and Representative Ritchie’s bill (SB 1383 and HB 1043) creates an exemption for termination of alimony in futuro awards if the parties agree and the Court orders that such an award be alimony in solido.
Senator Herron’s relocation bill (SB 1235) requires the custodial parent to notify the Court of any intention to move the child out of the state. It also authorizes the non-custodial parent to request a hearing to determine if moving the child out of state is in the best interest of the child. SB 1623 sponsored by Harper and HB 1140 by Patton establishes standard for court to use in determining right of parent to move out of the jurisdiction.
Obviously, the largest bill is the Parentage Act of 1997 (SB 0747), sponsored by Senator Cohen and HB 1073 McMillan, which rewrites the chapters on the establishment of parentage of children. This bill also defines the statute of limitation for establishing parentage and gives both the Juvenile Court and Trial Court general jurisdiction.
The following are three bills focusing on domestic violence:
l Orders of Protection/SB 529 Burks/HB 788 McMillan
The Violence Against Women Act mandates that all states, territories and tribal courts provide full faith and credit to orders of protection issued by courts of other states, territories and tribes. This bill provides guidance and procedures to assist both battered women and law enforcement, the courts and other parts of the system in knowing how to implement the law.
l Mediation/SB 793 Burks/ HB 1052 McMillan
Prohibits mediation in divorce and child custody/visitation cases where domestic violence has occurred unless: (1) the victim agrees to or requests mediation; (2) the mediator has training in domestic violence; and (3) the victim can have an advocate present during the mediation.
l Spousal Rape/SB 1082 Haynes/HB 1160 McMillan
Adds language to expand who can charge their spouse with rape to include spouses who have lived apart for at least thirty days even though they have not filed for divorce. The bill also deletes the requirement for victims to take these charges directly to the grand jury for indictment.
By the time you receive this newsletter, the section will have sponsored seminars on Hot Topics in Family Law in Memphis, Nashville and Knoxville. We also plan a CLE program for the Annual Convention.
The Family Law Code Commission, which was formed last year through action of the immediate past Section Chair, Amy Amundsen, has been extraordinarily busy working on legislation for the 1997 session of the Tennessee General Assembly. The Chair and Chair-Elect of the Section have standing positions on the Commission. The Commission has prepared and filed three pieces of legislation after approval by the Tennessee Bar Association through the auspices of the TBA lobbyist, Steve Cobb. Those are the Parentage Act, the Parental Access Bill and the Abolition of the Tender Years Doctrine. You may read more about these bills in the Legislative Chair’s Report elsewhere in this newsletter. The Section has also refiled the Public Pension Bill. There continues to be many problems to work out on this bill.
The Commission has been meeting monthly to review custody and child support-related bills. The most potentially far-reaching piece of legislation is a pilot project which will heavily interject mediation into the custody process. The pilot project will take place in three judicial districts, apparently including those in which Rutherford and Cannon counties lie and Shelby County.
There may be a third judicial district included as well. All parents in custody litigation would be required to attend an educational seminar on the impact of divorce on children. The bill will require parents to attempt to reach agreement on a parenting plan during the pendency of the divorce. After ninety days, if they have not been able to agree between themselves, they will have to notify the court of what sort of alternative dispute resolution pursuant to Rule 31 that they desire to use in a further effort to come up with a parenting plan. The cost of the ADR would be taxed as court costs or would be subsidized for parties unable to pay. Funds for the subsidized ADR would be raised through a $10 additional fee to obtain a marriage license. If the parties could not reach agreement through ADR, then each would be required to submit a proposed parenting plan to the court no later than forty-five days before the trial date.
The parenting plans will include child support provisions as well as residential and decision-making provisions. It is contemplated that the current system of one parent being the primary decision maker and the children living primarily with that parent will not change from current practice. Parties will be permitted to agree to other sorts of arrangements.
Except as necessary to meet requirements of state and federal law, the terms parenting functions, primary residential parent and parenting schedule will be used rather than the terms custody and visitation. The bill has safeguards built in to protect victims of domestic violence and to permit opting out of mediation for good cause. The bill also contains provisions requiring the court to consider the history of parents in performing parenting functions and cooperating with regard to meeting the needs of the child before any mutual decision making can be ordered.
The issues of relocating a child to live outside the jurisdiction of the court, and the issue of grandparent visitation are also very hot topics in the legislature this year and the Commission is studying those issues with a view toward making suggestions and recommendations to the General Assembly as it considers legislation in those areas.
With regard to the Tennessee Child Support Guidelines, the Department of Children’s Services is proposing changes to the Guidelines. The Commission had an opportunity to have input into those changes. The most significant change will permit a child support obligor, in cases where the obligor’s net monthly income exceeds $10,000 to attempt to show that some reduction from the Guidelines percentage over and above what is payable on the $10,000 net should be granted to the extent the excess payments are more than appropriate for additional direct needs of the child and an educational trust fund. v
The Tennessee Office of Criminal Justice is reviewing grant proposals from all the judicial districts as part of the statewide strategy to stop violence against women. Grant funds may be used to develop and implement effective law enforcement and prosecution strategies to combat violent crimes against women and the development and enhancement of victim services in cases involving violent crimes against women. Eligible applicants include state agencies, local units of government and non-profit organizations which provide services to victims. The definition for victim services providers under this grant is a nonprofit, non-governmental organization that assists domestic violence or sexual assault victims, including rape crisis centers, battered women’s shelters, and other domestic violence or sexual assault victims through the legal process.
Applicants must address the following goals in their grant proposal:
ï Change the community’s attitude to one in which violence against women will not be tolerated, by increasing the community’s awareness, concern and involvement regarding the issue of violence against women including family and domestic violence, acquaintance rape and sexual assault.
ï Increase the system’s knowledge of the nature and extent of violence against women and identify effective interventions in the areas of law enforcement, judicial system and target population areas.
ï Improve coordination and compatible data collection and communication systems linking police, prosecutors, victim services and other service agencies for the purpose of identifying and tracking arrests, protection orders, violations of protection orders, prosecutions and convictions to ensure uniformity.
ï Increase the abilities of the state and communities to form a coordinated response to violence against women.
ï Integrate the community into the service and response system.
ï Improve or develop community services related to violence against women.
If you have any questions about the Stop Violence against Women grants, please contact Helen Cooper or Jeanne Norris at the Office of Criminal Justice Programs, 615-741-3784. v
I. Overall scope of program
In December, 1996, the Supreme Court finalized all parts of Rule 31 which allows courts on their own motion or on the motion of either party to refer parties to a non-binding ADR process such as mediation. In anticipation of this rule, the Davidson County courts have received $20,000 per year to use for mediation services, particularly for family cases for the past two years. We have documented serving 30 families with approximately 30 trained mediators of the Mediation Association of Tennessee, Nashville Chapter. Overall, the settlement rate has been 75%. In the remaining cases, the issues were narrowed and most, if not all, eventually settled. The satisfaction rate among all users of the mediation process has been very high. This year we have an ADR coordinator in the Court Administrator’s Office who will help to arrange mediations with the parties.
II. What is Mediation?
Mediation is a process where there is intervention by an impartial and neutral third party who has no authoritative decision-making power to assist a husband and wife, a father and mother in voluntarily reaching their own mutually acceptable settlement of issues in dispute. Mediation is a voluntary process. In other words, even if the parties are referred to the mediator by the court, the decision is totally in their hands or they can choose to leave the mediation process at any time. The mediator is trained in the skills of helping parties to resolve their own disputes.
III. What is the role of the attorneys?
The parties’ attorneys may wish to be present at the mediation depending on the parties’ desires or finances. It is recommended that each party have an attorney or that they have an attorney advise them on an agreement prior to it becoming an order of the court. The attorneys should also work closely with clients to gather information on finances, valuation of assets and tax consequences. If there is domestic violence or there is a real imbalance between the parties’ negotiating power, it is advisable to have the attorneys present. In order to ensure enforceability, it might be wise for them to be present at the final session.
IV. Eligible Cases
Preference is given to court-referred cases. The initial contact point will be with the ADR coordinator. Major emphasis will be on helping people to resolve initial separation problems including where the parties will live, their parenting arrangements and the use of family resources. The secondary emphasis will be on permanent parenting arrangements or visitation disputes. Mediation can also be used for resolving post-divorce disputes. Finally, if time or resources permit, any aspect of the divorce may be mediated, depending on the skill of the mediator, the inclinations of the parties and the wishes of their attorneys.
V. Referral to mediator
If parties jointly wish to seek the services of a family mediator voluntarily, they may call the ADR coordinator in the Court Administrator’s Office for a referral list. The parties will be responsible for making the initial appointment with the mediator or the ADR coordinator will help them do so. If the court refers the parties, they may choose either the mediator of the week or anyone on the referral list, which shortly will have the court-approved Rule 31 mediators. If only one of the parties wishes mediation, that party may file a motion with the court requesting the court to order the parties to mediation. If appropriate, the court will refer the parties to mediation for at least the first session. Each Friday morning there will be a showing of a 20 minute video on mediation, produced by the Ohio courts in connection with the National Center for State Courts in Second Circuit Court jury room. A member of the Nashville Mediation Association or the ADR coordinator will be present to answer questions on mediation in general.
VI. Qualifications and ethics of family mediators
Any person who is an attorney, social worker, psychologist, educator or counselor is eligible to be a family mediator under Rule 31. Each mediator must have at least 40 hours of family mediation training, including three hours of domestic violence training and six hours of family law. Each mediator must have observed at least one mediation done by a Rule 31 mediator. Most have completed at least five mediations and have had peer supervision on two of those mediations. Persons who have not completed five mediations will co-mediate with a more experienced mediator. Rule 31 provides the standards of conduct for mediators. If there is an ethical violation it can be reported to the Commission on Alternative Dispute Resolution for a decision.
VII. Fees for mediators
All mediators are paid a supplement up to a maximum of $75.00 per hour by the Court Administrators office upon presentment of an application form, similar to the court appointment form. They will be paid either for each session spent with the clients or at the conclusion of the case.
VIII. Fees for parties
If the mediation is during a divorce, the total resources of the family will be considered. If the mediation is post-divorce, then the individual resources will be considered. The fees are on a sliding scale from $5 per hour to $37.50 per hour, on an income from $0 to $50,000. Generally each session will last one and one-half hours. The parties will pay their fee directly to the mediator. If the parties exceed six hours, they must seek permission from the ADR coordinator.
IX. Reporting results of the mediation
The mediator reports the results of the mediation to the court either by a signed agreement, approved by their attorneys or simply that the mediation did not produce a settlement. If the parties have an extended mediation, the mediator must report to the court every 30 days. The court shall not inquire as to any further details of the mediation.
X. Evaluation of the mediator
Following the conclusion of each mediation, the parties evaluate the mediator. These findings are collected by the court for both future planning and retention of the mediator on the court’s list.
XI. Future plans
Now that we have the plan in place with some supporting funds, we need to funnel more persons into the program. A letter will soon be distributed to attorneys requiring them to be present at a status conference 120 days after filing, if the divorce is not final. The ADR coordinator will refer them to a mediator, unless the case is not appropriate for mediation. In addition, the parties will be given more information about mediation at the time of the filing along with a brochure and order requiring them to go to the Families First, Children Cope with Divorce. Finally, we are designing a form to be submitted with the final decree which captures the use of mediation that did not originate with the court’s program to assess how the culture is changing and the use of mediation is increasing.