When you think of people getting victimized in the middle of divorce who comes to mind? Lawyers, right?
There certainly are plenty of lawyers whom I’ve watched stir up enmity between two spouses who started out cooperative, causing both of them to spend thousands of dollars in legal fees they can’t afford to pay, until they end up with a settlement that’s strikingly similar to the one they were talking about together before the lawyers got involved.
But this is not about those lawyers; it’s about the employers and money management firms that have discovered they can get one last pound of flesh out of couples who need to divide a retirement plan. I charge $300 to prepare the QDRO for the division of most defined contribution retirement plans. That’s less than most lawyers, but few lawyers charge more than $1,000 or so, at least where I practice. Recently when I told a divorcing couple about that charge, I had to add “but check with your employer; lately they’ve been adding a fee on their end.” Sure enough, their employer had added a $450 “processing fee” that somebody needed to pay, just to allow the wife to share their marital property.
Yes, the employer needed to do a little work to check my QDRO draft and make sure I had done it right, but that work was performed by salaried employees, and they performed their work at zero marginal cost to that employer. It’s not about recovering cost; it’s about finding a new way to kick their own employees in the groin.
I could almost understand if this were a big money management firm like Fidelity or Vanguard adding a charge like this. Their primarily relationship is with the employer, not the employee, and they really have no reason to care if my client lives, dies, or goes bankrupt. But this was my client’s employer, who professed to care deeply about their worker who was going through one of the most miserable times of his life. Why couldn’t they cut the poor slob a break?
Because this page discusses my practice, I need to say this: no representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.