In re Marriage of Englehard, 2019 IL App (2d) 180617-U

In re Marriage of Englehard, 2019 IL App (2d) 180617‑U

1) Case citation and parties
- In re Marriage of Englehard, No. 2‑18‑0617 (2d Dist. Oct. 15, 2019) (Rule 23 order; non‑precedential).
- Petitioner‑Appellant: Thomas Engelhard. Respondent‑Appellee: Melissa Engelhard.

2) Key legal issues
- Whether a marital settlement agreement (MSA) that generically divides the marital portion of “retirement benefits through his employer” encompasses a non‑qualified (ERISA‑exempt “top‑hat”) deferred compensation plan.
- Whether the trial court could enforce/divide the marital portion of that non‑qualified plan (and survivor benefits) by entering/amending a QDRO or, alternatively, requiring substitute relief (direct payments and life‑insurance/death benefit).
- Allocation of burdens of proof and remedies when plan valuation or plan acceptance of a QDRO is uncertain.

3) Holding/outcome
- The appellate court affirmed the trial court’s determination that the MSA’s generic language (use of “include”) covered the Hartford Excess Pension Plan II (a non‑qualified top‑hat plan) and that the marital portion should be divided.
- The court approved the trial court’s order for the husband to pay the monthly shortfall and back payments (as determined below), but reversed the trial court’s requirement that husband obtain a $250,000 alternative death benefit because there was no evidentiary basis for that specific amount.

4) Significant legal reasoning
- Contract interpretation: The MSA’s use of “include” signaled a non‑exhaustive list; plain‑language reading showed intent to divide all marital retirement benefits from Hartford, qualified or not.
- ERISA/non‑qualified plans: A non‑qualified (top‑hat) plan can be marital property divisible by state court order, but whether the plan will honor a QDRO is a matter for the plan administrator — plan terms don’t negate the court’s authority to allocate the marital interest. Pension trusts are separate stakeholders and may assert their own defenses.
- Burden of proof: The party asserting nonmarital character or seeking a particular valuation bears the burden to prove same. Where valuation/maturation is uncertain, the court may award a percentage or “if, as, and when” interest and fashion substitute relief (e.g., direct payments) as equitable.
- Standards of review: manifest weight for factual findings; abuse of discretion for property division.

5) Practice implications (concise)
- Draft MSAs expressly: identify each plan (qualified and top‑hat), specify marital percentages, and address survivor/designation issues and what happens if a plan won’t honor a QDRO.
- Preserve remedies: include express reservation of jurisdiction and fallback remedies (direct payments, percentage awards, life‑insurance/alternative security) and specify valuation methodology and who bears valuation costs.
- Prove valuations: obtain expert valuation or plan statements before or at hearing if disputing marital share or survivor‑benefit value; absent proof, courts may allocate using available evidence.
- QDRO strategy: remember plan acceptance is governed by plan documents — require the participant to pursue plan acceptance and to provide administrator responses; anticipate that top‑hat administrators may nonetheless “honor” state orders in practice.
- Note: this is a Rule 23 (non‑precedential) opinion.