Bench & Bar of Minnesota is the official publication of the Minnesota State Bar Association.

Collecting Child Support & Maintenance: A New Role for QDROs

A tool more typically employed for transferring retirement assets has potential for the collection of past-due child support and spousal maintenance.  While QDROs must be handled with care and may contain traps for the unwary, they can be an effective tool for ensuring payment.

Nearly every attorney who practices in family court has at least one war story of a truly recalcitrant obligor:  a party ordered to pay child support or spousal maintenance who proceeds to treat his or her obligation as anathema.  Payments are missed, former spouses and children go without, and in the more dire cases, homes may be lost and bankruptcy contemplated.  The obligee often turns to friends and extended family for help, while the obligor smugly thumbs his or her nose at attempts to enforce payment.  If money can be found for legal fees, the injured party’s attorneys may bring contempt actions.  Otherwise, they join the wait list for bringing such actions through Support and Collections.  If contempt cannot be established, the public authority may seek suspension of driver’s or professional licenses. Often despite the punishments leveled, payment is still not forthcoming.

Since the 2008 economic downturn, collecting child support and spousal maintenance has posed an ever greater challenge even with far less intractable obligors.  As incomes drop and bank account balances dwindle, attorneys find themselves increasingly in need of creative strategies for collecting and enforcing child support awards. Traditional contempt motions are too costly, or take too long when asking the public authority to bring the action, and wage withholding and bank account levies too often come up empty.

Often overlooked, Qualified Domestic Relations Orders (QDROs) are instruments the family law bar would do well to consider adding to their enforcement toolkit.  While QDROs are familiar to family law attorneys as a vehicle for transferring certain retirement assets, there is also untapped potential to use QDROs for the collection of past-due child support and spousal maintenance, and even for securing future support payments.  Though collection techniques inevitably will be tailored to the circumstances of the individual case, being able to tap into an obligor’s 401(k) may provide a client with faster access to cash than more punitive enforcement measures (such as contempt or license suspension).

ERISA Concerns

As an initial matter, when attempting to satisfy any obligation with funds from an obligor’s 401(k) or other retirement plan, the threshold barrier would appear to be ERISA’s anti-alienation provision which prohibits assigning or alienating funds in an employee benefit plan.1 However, as in any divorce in which retirement funds are divided, the general rule against alienation does not apply where the funds are divided using a “qualified domestic relations order.”2

After the enactment of ERISA in 1974, disagreement arose in the federal courts as to whether QDROs could be used to satisfy family support obligations.3 Ultimately, Congress responded by enacting the Retirement Equity Act of 1984, which specifically addressed concerns that ERISA’s anti-alienation provisions might prevent family support obligations from being satisfied from funds in an otherwise protected retirement plan.4 Interpreting the 1984 act, the United States Supreme Court explained that one of Congress’s central purposes in amending ERISA had been, “… to give enhanced protection to the spouse and dependent children in the event of divorce or separation … .”5

As presently drafted, ERISA defines a “domestic relations order” as “any judgment, decree, or order” that:

(1) relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant, and

(2) is made pursuant to a State domestic relations law (including a community property law). 6 (emphasis added)

To be “qualified,” the domestic relations order need only be one “which creates or recognizes the existence of an alternate payee’s right to, or assigns to an alternate payee the right to, receive all or a portion of the benefits payable with respect to a participant under a plan,” as well as meeting certain technical requirements.7

In sum, ERISA, by its own terms, actually enables recovery, rather than acting as a bar against it, and either a former spouse or a parent acting on behalf of a minor child (in the case of never-married parents), may request the entry of a QDRO to satisfy a past due family support award.

National Trend

The use of QDROs to enforce past due support has, under a variety of factual scenarios, received increasing approval across the country.  Indeed, courts in Florida,8 North Carolina,9 Maryland,10 Ohio,11 Indiana,12 Iowa,13 Missouri,14 Illinois,15 and Pennsylvania16 have all offered some measure of judicial sanction to the use of QDROs to satisfy family support arrears.17

However, the courts of other states have been cautious where the use of a QDRO to enforce a divorce decree bears too close a resemblance to the modification of a final property division.18 This was precisely the concern expressed by the Virginia Court of Appeals in the case of Hoy v. Hoy, in which the court expressed concern that the wife’s request for the entry of a QDRO to satisfy $84,000 in spousal maintenance arrearages that the husband owed her was akin to “… an attempt to reopen and modify the court’s final decree of divorce.”19 However, as other jurisdictions have begun to question the reasoning in Hoy, even the Virginia courts appear to be relaxing their position.  Indeed, the Virginia Court of Appeals recently approved the use of a QDRO for the satisfaction of support arrearages where the request was made during the pendency of the divorce proceedings.20 Although the reasoning employed by the Virginia court in Hoy does not appear to have gained wide acceptance, attorneys seeking to use QDROs to enforce family
support arrears would still be well-advised to draw a sharp distinction for the court between the (often impermissible) modification of a property division and the enforcement of a past-due support obligation.

Minnesota Applications

Within Minnesota, the legislature has provided specific statutory relief for obligees seeking enforcement of arrearages. Minn. Stat. §518A.39 Subd. 2(f) (formerly §518.64 Subd. 2) provides the statutory basis for the court to

impose a lien or charge on the divided property [provided by §518.58] at any time while the property, or subsequently acquired property, is owned by the parties or either of them, for the payment of maintenance or support money, or may sequester the property as is provided in section 518A.71.

Similarly, where an obligor fails to pay maintenance or support or refuses to give security for maintenance or support, “the court may sequester the obligor’s personal estate and the rents and profits of real estate of the obligor, and appoint a receiver of them.”21  Where an obligee seeks the satisfaction of child support or spousal maintenance arrearages through the entry of a QDRO, he will, of necessity, be relying upon §§518A.39 and 518A.71 as the statutory basis upon which a court can reach into an obligor’s retirement account for the satisfaction of past due family support.

Notably, these statutes address precisely the issue raised in the Hoy case, namely that these liens or charges are not a modification of a final property division, but a remedy for the nonpayment of child support or spousal maintenance.

What is more, where a party has proven unwilling to meet her child support or maintenance obligation, Minnesota courts have shown themselves willing to avail themselves of their §518A.71 powers to real effect. In an unpublished case, the Minnesota Court of Appeals even went so far as to uphold a district court order requiring sale of an obligor’s homestead if he failed to post a bond to secure payment of his maintenance and child support obligations.22  In that case, Campbell v. Machen, the court of appeals took note of the fact that the obligor owed over $90,000 in arrearages, resided in a $1 million home, and had a history of defaulting on his obligations.  Similarly, in another unpublished decision, the court of appeals again applied Minn. Stat. §§518.24 and 518.64 (now §§518A.71 and 518A.39 Subd. 2(f), respectively) in upholding a district court order requiring an obligor to establish a $400,000 interest-bearing trust to secure spousal maintenance after he failed to secure the obligation with life insurance as originally directed.23

Nor have courts shown themselves unwilling to use retirement funds—as distinct from home proceeds or other assets—to satisfy support and maintenance arrearages. In Grave v. Shubert, a district court in Polk County sequestered the retirement funds of an overseas obligor with retirement accounts in the United States.24  More explicitly and more recently, the court of appeals in Huntsman v. Huntsman affirmed a district court’s decision to reopen the parties’ Judgment and Decree pursuant to Minn. Stat. §518.145 and recalculate division of the husband’s retirement plan “for the purpose of enforcing [the husband’s support] obligation as ordered by the [c]ourt.”25  In Huntsman, the district court—apparently facing the same concerns over modifying a final property distribution that troubled the Virginia Court of Appeals in Hoy—found that the husband’s failure to pay his spousal maintenance obligation created “extraordinary circumstances” justifying reopening the parties’ Judgment and Decree under Minn. Stat. §518.145.  Having reopened the parties’ Decree, the district court then issued a QDRO allocating additional monies to the wife to satisfy the husband’s arrearages.  On appeal, the court of appeals cited §§518A.39 and 518A.71 as providing an independent basis for awarding the wife an additional share of the husband’s retirement account without reopening the Judgment and Decree.  In so doing, the court of appeals expressed a willingness to use QDROs not simply as a means for transferring marital retirement assets but for enforcing support arrearages separate and apart from the parties’ property division.

Questions and Caveats

If §§518A.39 and 518A.71 as interpreted in Huntsman permit the entry of a QDRO for the satisfaction of support and maintenance arrearages (or the creation of a fund to secure a future obligation), the question inevitably arises whether a QDRO is suitable for a
particular case. In making this determination, the practitioner must consider both the plan’s current status and the type of plan (i.e., defined benefit versus defined contribution), as the answers to both these questions will affect whether a QDRO is the most effective method for achieving the client’s goals.  If the plan is already in payout status, a garnishment or levy may be the preferred means to access these funds. If the plan is a defined contribution plan, such as a 401(k), it may allow for the disbursement of a lump sum to satisfy a large arrearage (or create a large fund to secure future payments).  Conversely, a defined benefit plan may not permit lump sum distribution but may allow for the assignment of a portion of the benefit for the payment of ongoing support.  Because a QDRO cannot require a plan “… to provide any type or form of benefit or any option, not otherwise provided under the plan,”26 if the obligor is not currently eligible to receive benefits under the plan, the obligee may find her efforts frustrated.  For example, if the obligor has not reached the age at which benefits can be drawn under a defined benefit plan, the obligee trying to obtain payment by way of a QDRO may be frustrated with the prospect of a payment that is still several decades off.

The issue of taxes should also be addressed.  If a pretax, defined contribution plan is being used to satisfy a large child-support arrearage, the practitioner will want to consider “grossing up” the award to account for the tax consequences that will be incurred by taking the disbursement instead of receiving tax-free child-support payments.

Finally—and particularly in cases of child-support arrearages—the practitioner will want to consider whom to name as “alternate payee” under the QDRO.  In some instances, it may be worth considering naming the minor child as the beneficiary rather than the former spouse, though this will necessarily be a case-by-case calculation.27


As family law attorneys need to become increasingly creative to enforce maintenance and support obligations, the QDRO should not be overlooked as a cost-effective means for satisfying arrearages and securing ongoing support.  Although QDROs always contain traps for the unwary, if prepared and used properly they can be an effective tool for ensuring payment.

Michael P. Boulette is an attorney at Kathleen M. Newman + Associates, practicing exclusively in the area of family law.  Michael received his J.D., magna cum laude, from the University of St. Thomas School of Law where he was articles editor of the University of St. Thomas Journal of Law and Public Policy.  


Leave a Reply

Articles by Issue

Articles by Subject