Introduction
When you’re going through a divorce, splitting retirement assets might not be the first thing on your mind—but it should be. If you or your spouse work for Thumb bancorp, Inc.. employee stock ownership plan and have retirement savings in the Thumb Bancorp, Inc.. Employee Stock Ownership Plan, you’ll need a Qualified Domestic Relations Order (QDRO) to divide that account correctly and legally.
Not all retirement plans are the same, and ESOPs—Employee Stock Ownership Plans—like the Thumb Bancorp, Inc.. Employee Stock Ownership Plan have some unique characteristics that make QDROs a little more complicated. Below, we’ll walk you through what makes this ESOP different, what information you’ll need, and how to avoid common missteps that could cost you time and money.
Plan-Specific Details for the Thumb Bancorp, Inc.. Employee Stock Ownership Plan
Here’s what we know about the plan involved:
- Plan Name: Thumb Bancorp, Inc.. Employee Stock Ownership Plan
- Sponsor: Thumb bancorp, Inc.. employee stock ownership plan
- Address: 7254 MICHIGAN AVENUE
- Industry: General Business
- Organization Type: Corporation
- Status: Active
- Effective Date: Unknown
- Plan Year: Unknown to Unknown
- Plan Number: Unknown
- EIN: Unknown
- Participants: Unknown
Even with missing data like the plan number and EIN, this plan is still divisible through a QDRO. But the ESOP format does bring added complexity around how and when the stock can be valued, distributed, or sold.
What Makes ESOP Plans Different in Divorce
Unlike traditional 401(k)s or pensions, ESOPs involve company stock held for the benefit of employees. That creates some special situations when it comes time to divide the account in a divorce.
Stock Valuation Timing
One big issue with ESOPs is that company stock typically isn’t listed on a public exchange. The shares are privately held and valued only once a year, usually by an independent appraiser. That means the valuation date in your QDRO matters—if you pick a date that doesn’t line up with the plan’s annual valuation, the payout may not match your expectations.
At PeacockQDROs, we walk our clients through selecting the right valuation date to align with the plan’s annual review cycle. This prevents discrepancies in value, especially if the stock has fluctuated significantly over time.
Put Option Rights
Because ESOP shares can’t be sold on the open market, the Thumb Bancorp, Inc.. Employee Stock Ownership Plan—like most ESOPs—offers a “put option.” That means if your QDRO awards stock to the non-employee spouse, they have the right to sell it back to the company at fair market value, as determined by annual appraisals.
Understanding when and how that put option can be exercised is critical. If written incorrectly, a QDRO could award stock that the alternate payee can’t easily liquidate, tying up their share of retirement benefits. We make sure to address those rights clearly in the QDRO document.
Diversification and Distribution Rules
ESOP plans often include diversification rights once a participant reaches a certain age or years of service, allowing them to convert stock into cash or move it into another retirement account. But those rights don’t apply automatically to alternate payees. Your QDRO needs to be very specific about who has those rights and when.
Also, the plan may limit when distributions can occur. Many ESOPs restrict payouts to once per year or tie them to specific retirement or departure events. This can delay when the alternate payee gets paid. A QDRO must anticipate those timing rules so spouses don’t wait unexpectedly long for payments.
QDRO Requirements for the Thumb Bancorp, Inc.. Employee Stock Ownership Plan
To divide the Thumb Bancorp, Inc.. Employee Stock Ownership Plan properly, your QDRO must meet both federal standards and the plan administrator’s specific requirements. While the plan number and EIN are currently unknown, these can usually be located with a little research or by requesting documents from the plan sponsor.
Here’s what your QDRO should include:
- Clear designation of this plan: “Thumb Bancorp, Inc.. Employee Stock Ownership Plan”
- Accurate participant and alternate payee information
- Specifics on the valuation date—aligning with the most recent stock appraisal
- Detailed instructions on distribution type (stock or cash)
- Information about how and when the put option may be exercised
- Contingency instructions in the event of the participant’s death or early distribution
Common Mistakes to Avoid in ESOP QDROs
Over the years, we’ve seen where many lawyers and clients go wrong with ESOP QDROs. These are the most common mistakes (which we help you avoid):
- Using outdated or incorrect stock valuation dates
- Failing to address the plan’s put option language
- Assuming stock can be liquidated immediately when often it’s subject to plan timing rules
- Leaving out diversification and future reallocation rules for alternate payees
We’ve compiled more information on frequent missteps in our guide on common QDRO mistakes.
Why Work with PeacockQDROs?
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. If you’re trying to divide a plan like the Thumb Bancorp, Inc.. Employee Stock Ownership Plan, you’ll want a team that understands the unique structure and timing restrictions of an ESOP.
Want to learn more? Check out our QDRO services or how long it can take to process a QDRO.
Get Help with Your Thumb Bancorp, Inc.. Employee Stock Ownership Plan 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 Thumb Bancorp, 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.