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Wednesday, March 21, 2018

The Tax Cuts and Jobs Act of 2017


            The Tax Cuts and Jobs Act of 2017 (“Act”) repealed the deduction for alimony and maintenance payments and made other changes to the Internal Revenue Code which will affect the negotiation of separation agreements as well as maintenance and child support awards made after January 1, 2018. The provisions of the Act which effect the tax aspects of maintenance and child support, and are of interest to matrimonial lawyers are discussed in this brief summary of the changes.

Alimony Deduction

            The most significant change is that the (“Act”) repealed the deduction for alimony payments for any divorce or separation instrument executed or modified after December 31, 2018. [1] 

             Under existing law [2] alimony and separate maintenance payments made pursuant to a divorce or separation instrument are deductible by the payor spouse and includible in income by the recipient spouse.[3]

            The Tax Cuts and Jobs Act of 2017, [4] eliminated the deduction by the payor spouse for alimony and separate maintenance payments. The Internal Revenue Code provisions that specify that alimony and separate maintenance payments were included in income were repealed. 

            The repeal is effective for any divorce or separation instrument executed after December 31, 2018, or for any divorce or separation instrument executed on or before December 31, 2018, and modified after December 31, 2018, if the modification expressly provides that these amendments apply to the modification.[5] Alimony payments made pursuant to a divorce or separation instrument made on or after December 31, 2018, are no longer deductible by the payor or includable in the income of the recipient. Payments under existing orders continue to be deductible to the payor and are includable in the income of the recipient.
             IRC. § 215, “Alimony, etc., payments” was repealed.[6] It formerly provided, in part: “ In the case of an individual, there shall be allowed as a deduction an amount equal to the alimony or separate maintenance payments paid during such individual’s taxable year.”[7]  For purposes of this section, the term “alimony or separate maintenance payment” was defined to mean any alimony or separate maintenance payment (as defined in section 71(b)) which is includible in the gross income of the recipient under section 71.[8]
          Some ot the conforming amendments are discussed below.
         IRC § 71 [9] “Alimony and separate maintenance payments” was repealed. It formerly provided the general rule that gross income includes amounts received as alimony or separate maintenance payments.”[10] It defined “alimony or separate maintenance payments” as any payment in cash if--(A) such payment is received by (or on behalf of) a spouse under a divorce or separation instrument, (B) the divorce or separation instrument does not designate such payment as a payment which is not includible in gross income under this section and not allowable as a deduction under section 215, (C) in the case of an individual legally separated from his spouse under a decree of divorce or of separate maintenance, the payee spouse and the payor spouse are not members of the same household at the time such payment is made, and (D) there is no liability to make any such payment for any period after the death of the payee spouse and there is no liability to make any payment (in cash or property) as a substitute for such payments after the death of the payee spouse.[11]  A “divorce or separation instrument” was defined as (A) a decree of divorce or separate maintenance or a written instrument incident to such a decree, (B) a written separation agreement, or (C) a decree (not described in subparagraph (A)) requiring a spouse to make payments for the support or maintenance of the other spouse.  [12]   
     
IRC § 61[13] “Gross income defined” which contains the general definition of “gross income” was amended by striking paragraph (a) (8) titled “Alimony and separate maintenance payments” and by redesignating paragraphs (9) through (15) as paragraphs (8) through (14), respectively.  It had provided: “(a) General definition. -- Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items: (8) Alimony and separate maintenance payments;
           IRC § 62 [14]  “Adjusted gross income defined” was amended by striking paragraph (a) (10) which defined “adjusted gross income”  in the case of an individual, to mean gross income minus the following deductions:  … (10) Alimony.--The deduction allowed by section 215.”[15]

Child Support

            Child support payments pursuant to a divorce or separation instrument are not treated as alimony.[16] The treatment of child support has not changed under the Act.

Enhancement of child tax credit through 2025 and new family credit

  Under 2017 law an individual may claim a tax credit for each qualifying child under the age of 17. The amount of the credit per child is $1,000. A child who is not a citizen, national, or resident of the United States cannot be a qualifying child.[17]
            IRC § 24 (h) was added effective January 1, 2018 [18] and is titled “Special Rules for Taxable Years 2018 through 2025”.[19] Under the Act the aggregate amount of child credits that may be claimed is phased out for individuals with income over certain threshold amounts. [20] The otherwise allowable child tax credit is reduced by $50 for each $1,000 (or fraction thereof) of modified adjusted gross income (“AGI'') over $75,000 for single individuals or heads of households, $110,000 for married individuals filing joint returns, and $55,000 for married individuals filing separate returns. For purposes of this limitation, modified AGI includes certain otherwise excludable income earned by U.S. citizens or residents living abroad or in certain U.S. territories. [21]
      The credit is allowable against both the regular tax and the alternative minimum tax (“AMT''). To the extent the child credit exceeds the taxpayer's tax liability, the taxpayer is eligible for a refundable credit (the “additional child tax credit'') equal to 15 percent of earned income in excess of $3,000 (the ‘earned income'' formula). [22]

          Families with three or more children may determine the additional child tax credit using the ``alternative formula,'' if this results in a larger credit than determined under the earned income formula. Under the alternative formula, the additional child tax credit equals the amount by which the taxpayer's Social Security taxes exceed the taxpayer's earned income credit (“EIC''). [23]

          Earned income is defined as the sum of wages, salaries, tips, and other taxable employee compensation plus net self-employment earnings. At the taxpayer's election, combat pay may be treated as earned income for these purposes. Unlike the EIC, which also includes the preceding items in its definition of earned income, the additional child tax credit is based only on earned income to the extent it is included in computing taxable income. For example, some ministers' parsonage allowances are considered self-employment income, and thus are considered earned income for purposes of computing the EIC, but the allowances are excluded from gross income for individual income tax purposes, and thus are not considered earned income for purposes of the additional child tax credit since the income is not included in taxable income. [24]

           Any credit or refund allowed or made to an individual under this provision (including to any resident of a U.S. possession) is not taken into account as income and is not be taken into account as resources for the month of receipt and the following two months for purposes of determining eligibility of the individual or any other individual for benefits or assistance, or the amount or extent of benefits or assistance, under any Federal program or under any State or local program financed in whole or in part with Federal funds. [25]
 
          The child tax credit is temporarily increased from $1000 to $2,000 per qualifying child.[26]

          The credit is further modified to temporarily provide for a $500 nonrefundable credit for each qualifying dependent, [27]  other than a qualifying children. The provision generally retains the present definition of dependent. [28]

            The maximum amount refundable increases to and may not exceed $1,400 per qualifying child.[29] Additionally, in order to receive the child tax credit (i.e., both the refundable and non-refundable portion), a taxpayer must include a Social Security number for each qualifying child for whom the credit is claimed on the tax return. For these purposes, a Social Security number must be issued before the due date for the filing of the return for the taxable year. This requirement does not apply to a non-child dependent for whom the $500 non-refundable credit is claimed.[30]

      The present age limit for a qualifying child is retained. Thus, a qualifying child is an individual who has not attained age 17 during the taxable year. [31]

      Finally, the adjusted gross income phaseout thresholds are modified. The credit begins to phase out for taxpayers with adjusted gross income in excess of $400,000 (in the case of married taxpayers filing a joint return) and $200,000 (for all other taxpayers). These phaseout thresholds are not indexed for inflation. [32]

       In 2026 the rules for the child tax credit revert to the rules in effect in 2017 with a maximum credit of $1000 for a qualifying child and lower phaseouts. The provision for enhancement of child tax credit and new family credit is effective for taxable years beginning after December 31, 2017 and expires for taxable years beginning after December 31, 2025. [33]
 
Personal and Dependent Exemptions
 
            The personal exemption for tax year 2017 remains as it was for 2016: $4,050.  However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $261,500 ($313,800 for married couples filing jointly). It phases out completely at $384,000 ($436,300 for married couples filing jointly.) [34]
The Act suspended the personal and dependent exemptions from 2018 through 2025.[35] Taxpayers will be able to claim personal and dependent exemptions again in 2026.
Standard Deduction
               The standard deduction for married filing jointly is $12,700 for tax year 2017, up $100 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $6,350 in 2017, up from $6,300 in 2016, and for heads of households, the standard deduction will be $9,350 for tax year 2017, up from $9,300 for tax year 2016. [36]
 
The Standard deduction is increased from 2018 through 2025. The standard deduction amounts are $12,000 (single person), $18,000 (head of household) and $24,000 (married filing jointly).[37]
Medical Expense Deduction
Medical expenses remain deductible. For 2017 and 2018, medical expenses are deductible to the extent they exceed 7.5% of AGI. In 2019, the threshold will increase to 10% of Adjusted gross income (AGI).[38]






[1] IRC §24

[2] IRC §§ 61, 71, and 215.

[3] IRC §§ 215(a), 61(a)(8) and 71(a).

[4]  Public Law No: 115-97.

[5] Sec. 11051. Repeal of Deduction for Alimony Payments.


[6]  Former 26 U.S.C.A. § 215

[7] Former I.R.C. § 215 (a)

[8] Former I.R.C. § 215 (b)
[9] Former 26 U.S.C.A. § 71, I.R.C. § 71. 
[10] Former I.R.C. § 71(a).
[11] Former IRC § 71 (b)(1)
[12] Former IRC § 71 (b)(2)

[13] Former 26 U.S.C.A. § 61, I.R.C. § 61

[14]  Former 26 U.S.C.A. § 62, I.R.C. § 62 (a)

[15] Former 26 U.S.C.A. § 62, I.R.C. § 62 (a) (10)

[16] IRC § 71(c).

[17] Public law No. 115-97. (2017) See Conference Report at http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-466.pdf

[18] Act Sec. 11022 (b).

[19] Act Sec. 11022 (a).

[20] Act Sec. 11022 (a). Increase in And Modification of Child Tax Credit, amending IRC § 24 by adding at the end new subsection ‘‘(h) SPECIAL RULES FOR TAXABLE YEARS 2018 THROUGH 2025; Applicable in case of a taxable year beginning after December 31, 2017, and before January 1, 2026.  Act Sec. 11022 (b) provides that the amendment made by this section shall apply to taxable years beginning after December 31, 2017.

[21] Public law No. 115-97 (2017). IRC §24(h). See Conference Report at http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-466.pdf

[22] Public law No. 115-97 (2017). IRC § 24(h)(6).

[23] Public law No. 115-97 (2017). IRC § 24(h).

[24] Public law No. 115-97 (2017). IRC § 24(h).

[25] Public law No. 115-97 (2017). IRC § 24(h).

[26] Public law No. 115-97 (2017). IRC § 24(h)(2).

[27] As dependent is defined in IRC § 152,

[28] Public law No. 115-97 (2017). IRC § 24(h)(4).

[29] Public law No. 115-97 (2017). IRC § 24(h)(5). The Act uses an indexing convention that rounds the $1,400 amount to the next lowest multiple of $100.

[30] Public law No. 115-97 (2017). IRC § 24(h)(7). Additionally, a qualifying child who is ineligible to receive the child tax credit because that child did not have a Social Security number as the child's taxpayer identification number may nonetheless qualify for the non-refundable $500 credit.

[31] Public law No. 115-97 (2017). IRC §24(h).

[32] Public law No. 115-97 (2017). IRC §24(h)(3).

[33] Act Sec. 11022 (b). Public law No. 115-97 (2017). IRC §24(h)(7).

[35] See Act Sec. 11041. Suspension of Deduction for Personal Exemptions.
[37] Public law No. 115-97 (2017). See Conference Report at http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-466.pdf

[38] Act Sec. 11022 (a). Public law No. 115-97 (2017). See Conference Report at http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-466.pdf


Sworn Testimony That Marriage Irretrievably Broken Down for A Period Of At Least Six Months Sufficient to Establish Cause of Action for Divorce Under Domestic Relations Law § 170(7)



            In Johnston v Johnston, --- N.Y.S.3d ----, 2017 WL 6519486, 2017 N.Y. Slip Op. 08923 (3d Dept., 2017) Plaintiff (hereinafter the wife) and defendant (hereinafter the husband) were married in September 1989 and had two children (born in 1991 and 1995). In April 2014, the wife commenced the action.

            The Appellate Division held that the husband’s sworn testimony that his marriage to the wife had irretrievably broken down for a period of at least six months was sufficient to establish, as a matter of law, his cause of action for divorce pursuant to Domestic Relations Law § 170(7). Having determined that the husband established irretrievable breakdown pursuant to Domestic Relations Law § 170(7), Supreme Court was under no obligation to grant the wife a judgment of divorce on the ground of adultery or constructive abandonment (see Hoffer–Adou v. Adou, 121 A.D.3d at 619, 997 N.Y.S.2d 7)

Court Rules Amendments - 22 NYCRR 137.6 (a)(1) Amended




22 NYCRR 137.6 (a)(1) Amended

NY Order 17-0021 amended 22 NYCRR 137.6 (a) (1) dealing with the Mandatory Arbitration Procedure to add a provision that where the attorney seeks to commence an action against the client for attorney’s fees he must comply with the Fee Arbitration Rules. It modified 22 NYCRR 137.6 to read as follows

(a)(1) Except as set forth in paragraph (2), where the attorney and client cannot agree as to the attorney’s fee or where the attorney seeks to commence an action against the client for attorney’s fees, the attorney shall forward a written notice to the client, entitled Notice of Client’s Right to Arbitrate, by certified mail or by personal service. The notice (i) shall be in a form approved by the board of governors; (ii) shall contain a statement of the client’s right to arbitrate; (iii) shall advise that the client has 30 days from receipt of the notice in which to elect to resolve the dispute under this Part; (iv) shall be accompanied by the written instructions and procedures for the arbitral body having jurisdiction over the fee dispute, which explain how to commence a fee arbitration proceeding; and (v) shall be accompanied by a copy of the “request for arbitration” form necessary to commence the arbitration proceeding.
 

Friday, December 08, 2017

Recent Appellate Decisions of Interest - December 8, 2017


Court of Appeals


Dismissal of A Neglect Petition Divests Family Court of Jurisdiction to Issue Further Orders or Impose Additional Conditions on A Child's Release

In Matter of Jamie J., 2017 WL 5557887, 2017 NY Slip Op 08161 (2017) the Court of Appeals, in an opinion by Judge Wilson, held that Family Court lacks subject matter jurisdiction to conduct a permanency hearing pursuant to Family Court Act article 10-A once the underlying neglect petition brought under Article 10 has been dismissed for failure to prove neglect. The dismissal of a neglect petition terminates Family Court's jurisdiction.
Jamie J. was born in November 2014. A week later, at the request of the Wayne County Department of Social Services, Family Court directed her temporary removal from Michelle E.C.'s custody pursuant to an ex parte pre-petition order under FCA § 1022. Four days after that, the Department filed its FCA article 10 neglect petition. More than a year later, on the eve of the fact-finding hearing held to determine whether it could carry its burden to prove neglect, the Department moved to amend its petition to conform the pleadings with the proof. Family Court denied that eleventh-hour motion as unfairly prejudicial to Michelle E.C. and to the attorney for Jamie J. After hearing evidence, Family Court found that the Department failed to prove neglect, and therefore dismissed the petition. The Department did not appeal that decision. Family Court did not release Jamie J. into her mother's custody when it dismissed the article 10 neglect petition. Instead, at the Department's insistence and over Michelle E.C.'s objection, it held a second permanency hearing, which had been scheduled as a matter of course during the statutorily required first permanency hearing in the summer of 2015. Family Court and the Department contended that, even though the Department had failed to prove any legal basis to remove Jamie J. from her mother, article 10-A of the FCA gave Family Court continuing jurisdiction over Jamie J. and entitled it to continue her placement in foster care. Family Court held the second permanency hearing on January 19, 2016. There, Michelle E.C. argued, as she did here, that the dismissal of the neglect proceeding ended Family Court's subject matter jurisdiction and should have required her daughter's immediate return. Solely to expedite her appeal of that issue, Michelle E.C. consented to a second permanency hearing order denying her motion to dismiss the proceeding and continuing Jamie J.'s placement in foster care. The Appellate Division, with two Justices dissenting, affirmed.
      Judge Wilson observed that the appeal presented a straightforward question of statutory interpretation: does FCA article 10-A provide an independent grant of continuing jurisdiction that survives the dismissal of the underlying article 10 neglect petition? The Court rejected the Departments “hyperliteral reading of section 1088, divorced from all context,” to argue that Family Court's pre-petition placement of Jamie J. under section 1022 triggered a continuing grant of jurisdiction that survived the eventual dismissal of the neglect petition. In other words, even if the Family Court removes a child who has not been neglected or abused, it has jurisdiction to continue that child's placement in foster care until and unless it decides otherwise. The Court held that Section 1088's place in the overall statutory scheme, the legislative history of article 10-A, and the dictates of parents' and children's constitutional rights to remain together compelled the opposite conclusion. Family Court's jurisdiction terminates upon dismissal of the original neglect or abuse petition. Observing that the Court held in Matter of Tammie Z., "if abuse or neglect is not proved, the court must dismiss the petition . . . at which time the child is returned to the parents" (66 NY2d 1, 4-5 [1985]),  nothing in the legislative history of article 10-A suggested that its drafters intended to overturn the long-established rule, promulgated by pre-2005 decisions of the Court and of the Appellate Division, that the dismissal of a neglect petition divests Family Court of jurisdiction to issue further orders or impose additional conditions on a child's release. Instead, that history demonstrated that the drafters intended only to correct a technical issue that plagued article 10 and threatened the State's continued access to federal funding under Title IV of the Social Security Act. The order was reversed and the January 26, 2016 permanency order vacated.

Appellate Division, First Department


Appellate Division holds that under circumstances of case, court properly awarded prospective maintenance only. Credit properly denied for Payments towards mortgage and maintenance on marital residence. Such payments were made in satisfaction of defendant’s own contractual obligations and did not constitute voluntary payments contemplated under Domestic Relations Law § 236(B) (7) (a)

            In Aristova v. Derkach, 2017 WL 5575056 (1s Dept., 2017) on  December 27, 2004, the parties signed an agreement, effective as of August 1, 2004 (the Termination Agreement), pursuant to which they terminated a preexisting separation agreement but agreed, among other things, that property each had acquired before August 1, 2004 would be separate property.

            The Appellate Division held that the court correctly determined equitable distribution in accordance with the terms of the Termination Agreement, upon its finding after trial that defendant failed to prove that the Termination Agreement, which was written, signed, and properly acknowledged, was invalid. While he was not represented by counsel, defendant, an engineer with an MBA, was sufficiently sophisticated to be aware that he might need counsel, particularly given plaintiff’s forthright explanation that her purpose in entering into the agreement was to protect her rights to an apartment she had purchased before August 1, 2004, and the fact that she had given him a week to review the agreement before signing it. Moreover, plaintiff, although an attorney, was not a matrimonial lawyer, and needed the help of online forms in drafting the agreement.

            The Appellate Division held that under the circumstances of this case, the court properly awarded prospective maintenance only. During the first two years following commencement of the action, the parties lived together in the marital residence with their children. The trial evidence showed that, during that period, plaintiff voluntarily bore the majority of the family’s expenses, including costs associated with the parties’ cooperative apartment, and the family’s medical and dental insurance costs, as well as groceries and other family expenses. Defendant did not move for pendente lite relief until two months before the scheduled trial date.

            The Appellate Division rejected Defendant’s contention that he was entitled to a credit against the retroactive child support award because it was unsupported by a showing of any payments he made for child-related expenses. To the extent he relied on his payments towards the mortgage and maintenance on the marital residence, it found that these payments were made in satisfaction of defendant’s own contractual obligations and did not constitute the voluntary payments contemplated under Domestic Relations Law § 236(B) (7) (a) (see Krantz v. Krantz, 175 A.D.2d 865 [2d Dept 1991], accord Sergeon v. Sergeon, 216 A.D.2d 122 [1st Dept 1995]).

Appellate Division, Second Department

Family Court Act § 424–a(a) requires that parties to child support proceedings submit most recently filed income tax returns. Where petitioner mother failed without good cause to submit most recent tax returns Support Magistrate improvidently exercised discretion in failing to adjourn proceeding until mother filed required documents

In Matter of Feixia Wi-Fisher v Michael, --- N.Y.S.3d ----, 2017 WL 5473843 (2d Dept., 2017) the Appellate Division held that the Support Magistrate properly imputed income to the father based on his future earning capacity and the funds he received from his wife to pay his expenses, where he had access to his wife’s bank accounts which were used to pay the household’s expenses.

            The Appellate Division observed that Family Court Act § 424–a(a) requires that parties to child support proceedings submit certain required financial documents, including the party’s most recently filed state and federal income tax returns. When a petitioner fails without good cause to file the required documents, “the court may on its own motion or upon application of any party adjourn such proceeding until such time as the petitioner files with the court such statements and tax returns” (Family Ct Act § 424–a[c] ). Here, the mother failed without good cause to submit her most recent tax returns. Further, her testimony and the financial documents she did submit did not remedy her failure to make complete financial disclosure, since the mother’s financial disclosure affidavit contained inconsistencies, her claimed rental income was unsubstantiated, and her testimony regarding her income and expenses was determined to be incredible. Accordingly, the Support Magistrate improvidently exercised her discretion in failing to adjourn the proceeding until such time as the mother filed the required documents. It remitted the matter for a new determination of the father’s child support obligation following the mother’s submission of the required financial disclosure.



Error to awarded plaintiff portion of appreciation in value of defendant’s dental practice during marriage where she failed to establish the baseline value of the business and the extent of its appreciation


In Lestz v Lestz, 2017 WL 5473999 (2d Dept., 2017) the parties married in 1984. At that time, the defendant, who had been a dentist for at least five or six years, had his own dental practice at which the plaintiff was an employee. In 2007, the plaintiff commenced the divorce action. After a nonjury trial, the Supreme Court awarded the plaintiff a portion of the appreciation in value of the defendant’s dental practice during the marriage. The Appellate Division reversed. It observed that an increase in the value of separate property is considered separate property ‘except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse. (Domestic Relations Law § 236[B] [1] [d] [3]). The nontitled spouse has the burden of establishing that any increase in the value of the separate property was due at least in part to his or her direct or indirect contributions or efforts during the marriage. Here, the Supreme Court improperly awarded the plaintiff the sum of $91,500, representing, in effect, 25% of the appreciation in value during the marriage of the defendant’s dental practice, which was his separate property. Although the evidence at trial demonstrated that the plaintiff made limited contributions with respect to the practice, the plaintiff did not offer any proof of the value of the dental practice at the time of the marriage. Accordingly, she failed to satisfy her burden of establishing “the baseline value of the business and the extent of its appreciation” (Morrow v. Morrow, 19 A.D.3d at 254, 800 N.Y.S.2d 378 ), and the court erred in making an award to the plaintiff on this basis (see Ceravolo v. DeSantis, 125 A.D.3d 113, 117–118, 1 N.Y.S.3d 468; Clark v. Clark, 117 A.D.3d at 669, 985 N.Y.S.2d 276; Davidman v. Davidman, 97 A.D.3d 627, 628, 948 N.Y.S.2d 639; Albanese v. Albanese, 69 A.D.3d 1005, 1006, 892 N.Y.S.2d 631; Burgio v. Burgio, 278 A.D.2d 767, 769, 717 N.Y.S.2d 769). 

Appellate Division, Third Department\

Postsecondary education expenses are not subject to collection through income execution

In Dillon v Dillon, --- N.Y.S.3d ----, 2017 WL 5489353, 2017 N.Y. Slip Op. 08062 (3d Dept., 2017) the Appellate Division held, inter alia, that Family Court erred in directing that the mother’s  payments toward the child’s college education be made through the Support Collection Unit, as “postsecondary education expenses [are] a separate item in addition to the basic child support obligation” (Matter of Cohen v. Rosen, 207 A.D.2d 155, 157 [1995], lv denied 86 N.Y.2d 702 [1995]; see Cimons v. Cimons, 53 AD3d 125, 131 [2008]; Tryon v. Tryon, 37 AD3d 455, 457 [2007] ), not subject to collection through income execution (see generally CPLR 5241, 5242).

Appellate Division, Fourth Department


A Court Errs In Granting A QDRO More Expansive Than an Underlying Written Separation Agreement Regardless or Whether the Parties or Their Attorneys Approved the QDRO

            In Sanitllo v Santillo, --- N.Y.S.3d ----, 2017 WL 5505810, 2017 N.Y. Slip Op. 08155 (4th Dept., 2017) the parties divorced in 1994, and the separation agreement incorporated but not merged into their judgment of divorce provided that plaintiff was entitled to a share of defendant’s pension benefits “until her death or remarriage, or [defendant’s] death,” whichever occurred first. Although plaintiff remarried in August 1995, defendant’s attorney executed a qualified domestic relations order (QDRO) that was entered in February 1996. The QDRO did not provide that plaintiff’s entitlement to a share of defendant’s pension would terminate upon her remarriage. In April 2016, defendant filed his retirement documents with the New York State and Local Retirement System and discovered the existence of the QDRO. Shortly thereafter, he moved for, inter alia, an order vacating the QDRO inasmuch as it is inconsistent with the separation agreement. The Appellate Division agreed with defendant that the court erred in denying his motion to vacate the QDRO. A QDRO obtained pursuant to a separation agreement ‘can convey only those rights ... which the parties [agreed to] as a basis for the judgment’ “(Duhamel v. Duhamel [appeal No. 1], 4 AD3d 739, 741 [4th Dept 2004], quoting McCoy v. Feinman, 99 N.Y.2d 295, 304 [2002]). Thus, it is well established that a court errs in granting a QDRO more expansive than an underlying written separation agreement”, regardless whether the parties or their attorneys approved the QDRO without objecting to the inconsistency (see Page v. Page, 39 AD3d 1204, 1205 [4th Dept 2007]). Under such circumstances, the court has the authority to vacate or amend the QDRO as appropriate to reflect the provisions of the separation agreement (see Beiter v. Beiter, 67 AD3d 1415, 1417 [4th Dept 2009]). It found that the QDRO should never have been entered in the first instance because the clear and unambiguous language of the separation agreement provided that plaintiff’s rights in defendant’s pension benefits had terminated upon her remarriage.

            The Appellate Division rejected plaintiff’s contention that defendant was barred by laches from seeking to vacate the QDRO. “The defense of laches requires both delay in bringing an action and a showing of prejudice to the adverse party” (Beiter, 67 AD3d at 1416]; see Matter of Sierra Club v. Village of Painted Post, 134 AD3d 1475, 1476 [4th Dept 2015]). Even assuming, arguendo, that there was a delay in seeking to vacate the QDRO, it concluded that plaintiff did not demonstrate that she was prejudiced by that delay.