Retroactive Child Support in Maryland and D.C.

Retroactive child support is child support that is awarded for a period of time predating the child support order (i.e. child support payments for the past). Retroactive child support is applicable in both initial child support requests and any subsequent modifications. The laws regarding retroactive child support are different in each state, so it is important to understand what you can and cannot request from the Court.

Retroactive Child Support in D.C.

“In the District of Columbia parents have an unqualified obligation to contribute to the support of their children.” Burnette v. Void, 509 A.2d 606, 608 (D.C. 1986). Child support is a right which belongs to the child. Pursuant to D.C. Code § 16-916.01(v), a judicial officer may award support for a period not to exceed the 24 months preceding the filing of the petition or request for child support. This means that in D.C., a judge may award you retroactive child support to up to two years before when you initially file. In certain special circumstances, a judge may even award retroactive child support beyond the two-year time frame, but only when the parent with the duty to pay support has acted in bad faith or there are other extraordinary circumstances.

In Hight v. Tucker, the D.C. Court of Appeals held that a father who had no legal responsibility to support the child (i.e. paternity had not yet been established) was still required to pay child support retroactively. Hight v. Tucker, 757 A.2d 756, 761 (D.C. 2000). A child has the right to child support and “the legal status of [the child’s] caretaker has no impact on that right.” Id.

Retroactive Child Support in Maryland

            In Maryland, the Court may award retroactive child support only to the date of filing the request (either through a complaint for divorce, custody, or solely child support, or any request for modification thereto). M.D. Code, Family Law, § 12-101. This is an important consideration in deciding when to file your request for child support. You will likely not be entitled to any support prior to that date. Similar to D.C., child support is the right of the child and cannot be waived by the parents. “In the case of a child, the obligation of the [parent] to support, imposed by law, cannot be bargained away or waived.” Zouck v. Zouck, 204 Md. 285, 298-99 (1954).

            How is Retroactive Child Support Calculated?

            In Maryland and D.C., retroactive child support is calculated in roughly the same manner. Retroactive child support is calculated using the parties’ pre-tax income and childcare expenses and the physical custody/visitation arrangement at the time child support should have been paid. The Court will input these numbers into the child support guidelines calculation for their respective jurisdiction. The guidelines calculation will output a monthly child support amount. This number will be multiplied by the number of months for which outstanding child support was owed. The payor may receive credit for amounts previously paid.

Do you have further questions about your claim for retroactive child support? If so, please contact the Markham Law Firm team at 240-396-4373.

What is ERISA and why is it important?

ERISA is the Employee Retirement Income Security Act, a federal statute initially passed in 1974 and revised periodically since then. The main purpose of ERISA is to protect employees’ retirement savings in plans provided by employers by providing minimum standards for the plan fiduciaries.

It is important to note that not all employers have plans subject to the ERISA standards. Specifically, governments at all levels are exempt, as are many church plans and charitable 501(c) plans. In addition, private employers may have some plans that are subject to ERISA’s regulations and some plans that are not.

ERISA impacts family law practice when it comes to dividing retirement interests. Plans that are regulated by ERISA are called “qualified” plans. Most importantly, qualified plans are required to be divisible by QDRO. This requirement means that it is definitively possible to transfer a share of a qualified plan from one spouse to another as a part of the divorce proceedings. ERISA also provides minimum requirements for a participant to take out a loan from a retirement plan or protect a spouse’s interest in the survivor benefit during the marriage. These protections mean that during the marriage, the retirement account is fairly well protected from being disbursed without spousal consent, and the spouse must approve of someone else getting the survivor benefit. Once the divorce is final, though, those protections end. Qualified plans can still have additional rules and regulations that must be followed when dividing it in a divorce proceeding so it is important to look into each plan and know its intricacies.

Non-qualified plans are not subject to these rules and are thus not protected. They are not required to be divisible or to protect a spouse’s interest during the marriage. They may also not provide survivor benefits or require that survivor benefits be provided only to a surviving spouse and not a former spouse. A general word of advice for non-qualified plans is to tread carefully and do additional research into their specific rules.

If you have a qualified or non-qualified plan in your case and want assistance in handling it, or have other retirement issues, please contact our office at 240-396-4373.

When Can I File My QDRO?

In the best case scenario, the parties have negotiated their Agreement and filed for an uncontested divorce. The QDROs were attached as exhibits to the Agreement, and are filed with the Court in advance of the uncontested divorce hearing. When this happens, the Court will process the QDROs along with the Judgment of Divorce, so everything is generally entered on the same day.

What happens if that is not the case?

If the parties do not get the QDROs prepared before the uncontested divorce hearing, they should be completed as soon as possible thereafter, especially if a person is awarded survivor benefits. In cases where substantial time has passed, it is possible that the account holder has spent the money that should have been transferred, or died and had the funds disbursed to a different beneficiary or through the estate. In either scenario it is difficult or impossible to recover the funds for the former spouse.

Similarly, if the case goes to trial, the parties can have QDROs drafted and submitted during the trial in the event the Court agrees with their proposed division of the assets. Alternatively, if the QDROs are not submitted during the trial, they should be completed as soon as possible following the issuance of the Judgment of Divorce for the reasons listed above.

While the reasons listed here are more to protect the spouse that is to receive the funds, it is also a hassle being the party that owns the account to be divided. That party should safeguard the funds that are supposed to be transferred, which could be difficult if that party comes into a financial hardship.

Whenever possible, the parties should agree on when the process to draft the QDRO will start, and who is responsible for seeing it through to completion. This way, the expectations are clear for both parties.

At any point in your case, if you have a question about timing, or steps to take regarding the division of retirement assets, please contact our office at 240-396-4373.

Congratulations to Leah Ramirez on nomination to become a Fellow of the American Bar Foundation

The Fellows is a global honorary society of attorneys, judges, law faculty, and legal scholars whose public and private careers have demonstrated outstanding dedication to the highest principles of the legal profession and to the welfare of their communities. Membership in the Fellows is limited to 1% of licensed lawyers in a jurisdiction. Your nomination to the Fellows by your peers and your election by the Board of the ABF is a great honor.

More importantly, I am proud that as a Fellow, I support an organization committed to expanding knowledge and advancing justice. The ABF’s research, programming, writing, and policy recommendations have helped move the legal profession and society as a whole toward greater equality and justice.

QDRO Corner: Dividing an Individual Retirement Account

Individual Retirement Accounts (IRAs) by law do not require a Domestic Relations Order to divide upon divorce. So, many financial institutions have created their own form that in combination with the judgment of divorce will provide all the required information they need to transfer funds from the account holder to the former spouse.

 These forms are your friends, especially when drafting the separation agreement. They will tell you things like does the former spouse need to have an account at that financial institution to receive the funds? Will the financial institution transfer with gains and losses, or do they require a flat sum as of the date of transfer? Can you designate specific securities to be transferred? What documents do you need to submit with the form?

You want to think about filling out the form and attaching it to the separation agreement. Why? Some forms only require the signature of the account holder, so the former spouse doesn’t have to agree to the form before it’s submitted to the financial institution. In a contentious case where the parties don’t trust each other this can be a big deal. Having it filled out in advance can give the parties an expectation for what is supposed to be transferred.

The biggest hurdle we’ve seen with IRA transfers is that many require the use of their form regardless of if you had a Court Order done, and many financial institutions will NOT transfer gains and losses as of a historical date on a transfer amount. Meaning, they are requiring a flat sum or percentage of the account to be transferred as of the date of division. Given the volatile market this is a difficult fact for many to swallow.

We have come up with a few creative solutions to effectively include gains and losses, and are happy to work with you on your case to see if we can come up with something that works for you. Please contact the Markham Law Firm team to discuss solutions with our team.

Preparing for the Holidays During Divorce or Separation

The holidays are a stressful time for everyone – but especially those battling custody issues or in the process of a divorce or separation. However, you can take action now to reduce stress this coming holiday season.

If you and your spouse have an interim agreement, whether formal or not, it is important that you follow it. Stability is important for children and your compliance demonstrates a willingness to co-parent to the Court.

However, if you don’t have an interim agreement in place, now is the time to create one. In proposing a holiday schedule to your spouse, here are some important factors to consider:

• Work schedules

• School schedules

• Role of religion

• Any family traditions or events

• Children’s relationship with extended family

• Travel and logistics

• Current custody arrangement 

You and the other parent should work together to come up with the best holiday schedule for your family. Some popular holiday schedules include:

• Fixed holidays (i.e. one parent always gets Thanksgiving)

• Alternating holidays (i.e. one parent gets Thanksgiving this year and one parent gets Thanksgiving next year)

• Dividing school breaks (i.e. one parent gets the first half of winter break, one parent gets the second half)

• Dividing the day (i.e. one parent gets Thanksgiving for the first half of the day, one parent gets the second half)

• Or any combination of the above (alternating which parent gets the first half of winter break and which parent gets the second half)·     

Mediation is a great avenue to help you and your spouse communicate effectively and create a holiday plan that works for your family. Please contact the Markham Law Firm team at 240-396-4373 to schedule time with one of our trained mediators today.

QDRO Corner: Dividing Defined Contribution Accounts: When to Equalize the Balances Out of As Few Accounts as Possible, and When to Divide Each and Every Account

We’ve all seen the cases where the parties have multiple retirement accounts, some traditional, some Roth, some mixed, some IRAs, some qualified employer-sponsored accounts.

The first consideration is Roth and traditional funds. Roth funds have already been taxed, therefore they are of different value than traditional funds which will be taxed when removed from the retirement account. Since they are not of the same value, they should not be compared against each other. Meaning, if a couple has both Roth and traditional accounts there should be at least two DROs. 

The second consideration is the investments within the accounts. If equalizing multiple accounts out of just one, is that account invested in risky or conservative investments? Are all the accounts invested in a similarly risky or conservative fashion? Depending on how the market is behaving, it will impact the market gains and losses on the account balance, and will likely impact each party’s preference as to which account is funding the transfer.  

Since DROs take substantial time to be processed before the funds are actually transferred, this is an important consideration, especially in today’s volatile market. Someone in tune with the market might suggest the transfer come out of one account of another because they anticipate that such account will do better or worse in the market while the DRO is being processed. But, would it be more in line with the agreement to divide each account so that the transfer comes out of all the investments, risky and conservative, and the alternate payee shares in the gains and losses across all accounts?

The final consideration on whether to divide each account or equalize out of one account is the cost of having the multiple orders prepared. Sometimes parties have over 6 retirement accounts to divide, which at a cost per order could be substantial. In that case, the client has to determine whether they believe they will receive more gains from dividing each account and do they have the current cash available to pay for those orders.

QDRO Corner: Thrift Savings Plan UPDATE

Effective June 1, 2022, the TSP has a new administrator for processing court orders AND a new record keeper. The switch to the new administrator had caused substantial headaches in many areas, resulting in an investigation by the Government Accountability Office which is scheduled to begin before the end of the year.

As it relates to family law, however, here is the relevant information regarding the changes to TSP:

1.    Valuation dates for dividing a TSP account prior to June 1, 2022 MUST be the end of a quarter. If the date is not such a date, then the TSP court order administrator will use the closest quarter-end date for the valuation date. What does this mean for parties? Take control and pick a quarter-end date for any valuation date prior to June 1, 2022.

2.    Division forms allowed: a percentage of the account as of a date certain (or the transfer date) or a dollar amount specifying whether gains and losses are to be included on the dollar amount if as of a specific date. **Historically the TSP would allow for a percentage of the account’s accrual between two dates. This division type is no longer accepted, and will result in a rejected Order. How to handle this change? Treat the TSP like any other defined contribution account, and if there is a premarital interest, subtract it from any transfer calculation.

3.    The TSP court order administrator charges $600 to review and implement the court order. Previously no such fee was charged. How to handle this change? Include in any agreement or court argument how the fee should be paid, if entire by one party or the other, or shared between the parties. It will come from the retirement account and/or the funds being transferred depending on which party is supposed to cover this fee.

The above items tend to be more hurdles to jump over while reaching an agreement. This final major change makes it (somewhat) easier to submit the order to the TSP court order administrator.

1.    Scans of certified court orders can be uploaded directly to the TSP court order administrator. Although making a submission includes submitting your own email address, I am yet to receive a confirmation email. However, after making the online upload, the webpage refreshes to say that a determination will be made in 20 business days. Many orders that we have submitted have not received a determination letter within 20 business days. Instead, we have had to call TSP to confirm the order was still under review.

On the whole, what does this mean for parties seeking a divorce where a TSP is involved? Only that there are a few more pieces to consider in the negotiations. 

One final piece of information: many orders submitted during the transition period were lost. If you submitted an order in May/early June and have not heard back, you may want to call TSP to check if they have the order, as you may need to resubmit it.

QDRO Corner: Maryland State Retirement Pension System – Survivor Options

The Maryland State Retirement Pension System (“MSRPS”) is one of the few plans that requires MORE information in a domestic relations order for a retired employee than it does for active employees.

Once an employee in the MSRPS begins receiving benefits from the plan, the opportunity has passed for the employee to select or change survivor options and the pension can only be divided as a shared interest, not a separate interest.

The MSRPS does not allow the survivor benefit option that was selected at retirement to be changed via a domestic relations order. MSRPS does, however, require that the survivor benefit option selected at retirement be included in the domestic relations order. The plan administrator (the Attorney General’s office) won’t share this information with the domestic relations preparer or the attorney for the former spouse, so it has to be provided by the participant. Therefore, if your case involves a retired State of Maryland employee, not only should you request the plan statements in discovery to get the plan name correct, but you should also request the paperwork submitted upon retirement. These documents can be obtained via a subpoena, if necessary.

A full description of the survivor benefit options that can be selected can be found in the Md. Code, State Personnel and Pensions, § 21-403.

Legal v. Physical Custody Explained

One of the most challenging parts of separation and divorce is determining the most appropriate custody arrangements for your children. During this journey, parents must find a way to put their children’s interests first to determine the best custody schedule.

There are two types of custody: legal and physical. Legal custody, also known as “decision-making authority,” relates to a parent’s right and obligation to make decisions with lasting impact on their children. Such topics include education, religion, and medical care. Legal custody may be joint, sole, or have a parent designated as a tie-breaker when the parents cannot cooperate.

Physical custody, also known as “access” or “parenting time,” describes where the children will live. Included in this determination is the right and obligation of a parent to spend time with the children, provide a home for the children, and to make the everyday decisions that arise. In contrast, the children are in the care of that parent. Physical custody may be shared/joint or sole.

Because no one knows your family better than you, parents are encouraged to make physical and legal custody decisions by reaching a mutual agreement. However, if they cannot reach agreement, Maryland courts are equipped to resolve custody matters.

A court favors neither parent and is bound by what is in the children’s best interests. In order to make this determination, the court will consider several factors to determine what arrangement is in the children's best interest. Such factors include the parents' fitness, the parent's ability to communicate, and the geographic proximity of the parents, among many other relevant factors. Cynthia Callahan & Thomas C. Ries, Fader’s Maryland Family Law § 5-3(a) (6th ed. 2016).

Custody matters are some of the most challenging cases for parents, attorneys, and judges alike. If you want to pursue a custody agreement or seek legal representation in your divorce, contact our office at 240-396-4373 today.