Plaintiff filed for divorce. Through mediation the parties agreed to settle and defense counsel placed on the record the terms of their settlement.
The parties agreed to the distribution of the funds in defendant’s work-related 401(k). Plaintiff would receive $80,000 not subject to tax, plus $158,750 of pretax funds that would be subject to taxation, for a total of $238,750. Defense counsel advised the court repeatedly that defendant’s 401(k) held $80,000 in after-tax money. The trial court later entered a consent judgment of divorce that mirrored the settlement placed on the record.
Qualified Domestic Relations Order (QDRO)
A specialist prepared qualified domestic relations orders (QDROs) for entry by the court as required under the judgment. Plaintiff asserted that, upon disbursement, she received a check for only $23,211.82 in tax-free money. Plaintiff received $80,000, but of that she only received $23,211 of after-tax money and $56,788.77 that remained subject to taxation. The specialist concluded that plaintiff should receive an additional $18,910.66 because of the taxation of the disbursement to make her whole under the terms of the judgment.
Motion to Enforce Judgment
Plaintiff file a motion to enforcement the judgment of divorce on the grounds that defendant failed to pay her $80,000 tax free as provided under the judgment. Plaintiff also requested that the court award her attorney fees. Defendant opposed plaintiff’s motion on the ground that the judgment stated that the tax-free funds were merely presumed to be $80,000, and blamed plaintiff for not confirming the actual amount of pretax dollars that were in defendant’s retirement account. Further, defendant denied ever agreeing to pay plaintiff $80,000 in tax free funds because he did not believe that amount existed.
The trial court submitted the matter to a Friend of Court referee who reviewed the transcript of the settlement, the judgment, and the parties’ respective arguments, and concluded that the parties agreed that plaintiff would receive $80,000 of after-tax monies from defendant’s 401(k) and found that she did not receive the full amount.
The referee recommended that the trial court grant plaintiff’s request for enforcement of the judgment and require the parties to comply with its provisions and further recommended that plaintiff’s request for attorney fees be preserved and awarded should plaintiff have to return to court.
The trial court’s order denied defendant’s objections to the referee’s recommendation and affirmed and adopted the recommendation, granted plaintiff’s request for the balance of the retirement funds owed under the judgment and QDRO in the amount of $18,910.66 to be paid by defendant within 30 days of entry of the order.
Skilled Legal Assistance with Michigan Divorces
Are you facing a divorce in Michigan? Do you have questions about how your assets and your debts will be divided? Financial issues are often the biggest concern for individuals and families who are facing divorce. At Aldrich Legal Services, our attorneys understand the struggles you may face. We will work hard to help you obtain all to which you are entitled during your divorce.
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