A recent upstate appeal case (Fourth Department) re-affirmed the rule that moving funds from one account to another will not defeat equitable distribution and subsequent death will not defeat the terms of the Agreement. While this concept is well known by divorce attorneys the facts of this case were unusual and interesting.
The parties are getting divorced and the Husband has a Schwab IRA which is to be divided equally between the parties plus or minus any gains as of the date of transfer as per equitable distribution. The Wife's share was to be transferred into an account in her individual name all as set forth in their Settlement Agreement. Prior to the entry of the divorce decree, the Husband transferred all of the money into an IRA at the Equity Trust Company and had all of the funds invested in "precious metals" IRA. The QDRO that was prepared and served on the Equity Trust Company was not accepted because it called for the distribution to the Wife of her share of the funds that had been taken from the Schwab IRA account. Equity Trust Company advised that an amended QDRO would be necessary as they had to be instructed to liquidate from the IRA investing in "precious metals" in order to provide the Wife with her share.
Complicating the matter was the fact that the Husband, subsequent to the divorce, had died and the Wife had to pursue the request for the amended QDRO against the Husband's Estate as his daughter was the beneficiary of the IRA and she was contesting multiple aspects of the proceedings.
The appeals decision was that the Wife was entitled to an amended QDRO acceptable to Equity Trust because the Husband's transfer violated the automatic orders of the court not to transfer or encumber assets. The Wife was entitled to her share of the account even though he had died because of the Stipulation as well as his violation. His death did not terminate her rights as they were established during his lifetime. His transfer of the assets could be calculated with an amended QDRO so that the Wife's entitlement would be protected.
The one question that was interesting was that the Wife had asked for statutory interest of 9% on the monies owed to her and the appeals court denied that because the agreement provided for the calculation of gains and losses on her sum. I wonder whether the investment made or lost money and perhaps that was why she wanted interest on her share.
Clearly the court, even after the death of a party with a completed divorce will protect the rights of the survivor from wrongful acts during the divorce.