Loan Language—Inclusion or Exclusion?

To understand how your marital settlement agreement language can affect the award amount for your client, consider the following example:

Under a QDRO an Alternate Payee is entitled to receive 50% of the Participant’s account balance as of November 1, 2018. As of that date, the Participant had $10,000 in one of the Plan’s standard investment options. In addition, the Participant also had an outstanding loan balance of $1,000 on November 1, 2018. Depending on how the Order addresses the issue of loans, the amount to be divided could be either 50% of $11,000 (assuming the loan balance is included as an asset), or 50% of $10,000 (assuming the loan balance is excluded as an asset).