Dividing an ESOP in Divorce: What You Need to Know
If you or your spouse has an account under the Blaze Holdings, Inc.. Employee Stock Ownership Plan, and you’re going through a divorce, you’ll need a special court order called a Qualified Domestic Relations Order (QDRO) to divide the benefit legally. But because this plan is an ESOP—an Employee Stock Ownership Plan—there are unique factors that can complicate the process, such as stock valuation timing, distribution rights, and put options.
At PeacockQDROs, we’ve seen countless QDROs hit roadblocks not because of legal issues, but because people didn’t understand how specialized ESOP divisions really are. This article will show you what to watch out for, what to plan for, and how to protect your financial future when dividing the Blaze Holdings, Inc.. Employee Stock Ownership Plan during divorce.
Plan-Specific Details for the Blaze Holdings, Inc.. Employee Stock Ownership Plan
- Plan Name: Blaze Holdings, Inc.. Employee Stock Ownership Plan
- Sponsor: Blaze holdings, Inc.. employee stock ownership plan
- Address: 5640 ST. JEAN STREET
- Plan Year: Unknown to Unknown
- Effective Date: Unknown
- Status: Active
- Assets: Unknown
- Participants: Unknown
- Industry: General Business
- Organization Type: Corporation
- Plan Number: Unknown (required to complete a QDRO)
- EIN: Unknown (required to complete a QDRO)
Note: Because the EIN and plan number are currently unknown, these will need to be confirmed with the plan administrator before proceeding with a QDRO. This is something we routinely handle during the setup phase at PeacockQDROs.
What Makes an ESOP Like This Different From a 401(k)?
Unlike 401(k)s, which usually offer liquid cash accounts, ESOPs primarily hold shares of employer stock. That adds complexity. Here are a few ESOP-specific rules that affect how the Blaze Holdings, Inc.. Employee Stock Ownership Plan is divided:
- Stock valuation is not daily. Valuations typically occur annually. This means the value assigned to a participant’s account may fluctuate significantly and may not represent the stock’s worth on the date of divorce.
- Distribution is not automatic or immediate. Participants may not be eligible to take distributions until a certain age, separation from service, or retirement.
- Put options may apply. If distributions are made in company stock, separated participants or alternate payees may have the right to sell the stock back to the company—a key protection if the stock isn’t publicly traded.
- Diversification rights vary. Participants over a certain age or with a certain tenure may be able to diversify out of stock into cash. This affects what the alternate payee may receive.
QDRO Requirements for the Blaze Holdings, Inc.. Employee Stock Ownership Plan
The QDRO for dividing the Blaze Holdings, Inc.. Employee Stock Ownership Plan must follow Internal Revenue Code guidelines while meeting the plan administrator’s formatting rules. For an ESOP like this one, here’s what makes the QDRO process unique:
Confirming Stock Valuation Date
Because valuations are typically done annually, you must carefully choose the assignment date—either date of divorce, date of separation, or another trigger—to avoid over- or undervaluing a spouse’s share. If the valuation occurs December 31 and you divorce in June, the date you use will dramatically affect what the alternate payee receives.
Understanding Vesting and Forfeitures
If the participant is not fully vested, the alternate payee’s share must reflect that. Forfeiture provisions, common in ESOPs, must also be reviewed to avoid awarding benefits that may never vest.
Distribution Rules and Timing
Most ESOPs limit distribution rights to specific events, such as termination of employment or reaching retirement age. If the plan only pays distributions after the employee leaves the company, the alternate payee may wait years before receiving anything. It’s crucial to spell out distribution timing in the QDRO to set correct expectations and avoid future legal disputes.
Put Options and Share Redemptions
When stock is distributed to an alternate payee, many ESOPs provide a “put option”—the right to sell the shares back. The QDRO should reference this right clearly. If your plan allows for in-kind distribution of shares, ensure the alternate payee understands their rights to convert their portion into cash.
Diversification Rights
Depending on age and years of service, participants may be eligible to convert company stock to a diversified investment. Whether or not the alternate payee can benefit from that option depends entirely on how the QDRO is structured. Don’t assume – check the details upfront.
Why Getting the QDRO Right the First Time Matters
Getting a QDRO for the Blaze Holdings, Inc.. Employee Stock Ownership Plan wrong costs time and money. If the court issues a defective QDRO, the plan administrator will reject it. Worse, trying to “fix” a bad order months later can lead to valuation changes, tax problems, or loss of benefits. That’s why people turn to experienced QDRO professionals like us at PeacockQDROs.
Common ESOP QDRO Mistakes Include:
- Choosing an incorrect valuation date for stock
- Failing to account for put options
- Not specifying what to do if participant terminates employment
- Omitting distribution timing clauses that align with the plan rules
Want to learn more? Check out our guide on common QDRO mistakes.
How PeacockQDROs Handles Blaze Holdings, Inc.. Employee Stock Ownership Plan Divisions
At PeacockQDROs, we’ve completed thousands of QDROs from start to finish. That means we don’t just draft the order and leave you to figure out the rest. We handle the drafting, preapproval (if applicable), court filing, submission, and follow-up with the plan administrator. That’s what sets us apart from firms that only prepare the document and hand it off to you.
We maintain near-perfect reviews and pride ourselves on a track record of doing things the right way. We know how to work directly with plans like the Blaze Holdings, Inc.. Employee Stock Ownership Plan and understand the nuances ESOPs add to the QDRO process.
What You’ll Need to Get Started
- The participant’s plan statement
- The name of the plan (Blaze Holdings, Inc.. Employee Stock Ownership Plan)
- The plan sponsor’s legal name (Blaze holdings, Inc.. employee stock ownership plan)
- Plan number and EIN – we’ll help you request these if you don’t have them
- Details about divorce terms, including valuation and cut-off dates
For more on timing, visit our article on the 5 factors that determine how long it takes to get a QDRO done.
You can also start with our general QDRO hub here: https://www.peacockesq.com/qdros/.
Final Thoughts
Dividing an ESOP like the Blaze Holdings, Inc.. Employee Stock Ownership Plan isn’t difficult when you know what to expect. But it is different from dividing other plans. ESOP features like stock payout rules, company repurchase rights (put options), and annual valuation can throw off even the best-prepared parties if not carefully addressed in the QDRO.
If your divorce was in California, New York, New Jersey, Connecticut, Kansas, Missouri, Iowa, or North Dakota, and you have questions about qualified domestic relations orders or dividing retirement assets like the Blaze Holdings, Inc.. Employee Stock Ownership Plan, contact PeacockQDROs. We specialize in QDROs and have successfully processed thousands of orders from start to finish.
Get the answers you need—explore our QDRO resources or reach out for personalized help if you’re in one of our service states.