Protecting Your Share of the First Bank and Trust Company Employee Stock Ownership and Savings Plan: QDRO Best Practices

If you’re going through a divorce and your spouse has retirement assets in the First Bank and Trust Company Employee Stock Ownership and Savings Plan, it’s critical to get familiar with Qualified Domestic Relations Orders (QDROs). A QDRO is a special court order that allows retirement benefits to be divided between divorcing spouses. But when the retirement plan in question is an Employee Stock Ownership Plan (ESOP), there are extra layers of complexity.

This article breaks down the unique considerations for dividing the First Bank and Trust Company Employee Stock Ownership and Savings Plan in divorce, including stock valuation dates, distribution timing, diversification rights, and put option provisions. These details can have serious financial consequences for both parties if overlooked or misunderstood.

Before filing a QDRO or attempting to divide retirement benefits, it’s important to understand key plan-specific information:

• Plan Name: First Bank and Trust Company Employee Stock Ownership and Savings Plan
• Sponsor: First bank and trust company employee stock ownership and savings plan
• Organization Type: Business Entity
• Industry: General Business
• Address: 18528 Lee Highway
• Plan Number: Unknown (you may need to obtain this directly from the plan administrator)
• EIN: Unknown (this too may require confirmation with the sponsor or plan administrator)
• Effective Date: Unknown
• Plan Year: Unknown to Unknown
• Status: Active
• Assets: Unknown
• Participants: Unknown

Because this is an ESOP plan sponsored by a private business in the general business sector, there are some quirks you’ll need to account for when preparing and executing a QDRO.

Unlike more common retirement plans like 401(k)s or traditional pensions, ESOPs deal directly in company stock. In the case of the First Bank and Trust Company Employee Stock Ownership and Savings Plan, that means plan assets include shares in the company itself, not just cash or market-traded securities.

Here are some practical tips for getting it right when dealing with this ESOP in your divorce:

• Get a copy of the plan summary and full plan document from the plan administrator
• Find out the last and next stock valuation date
• Confirm whether the plan allows in-service distributions to alternate payees
• Clarify who can exercise the put option and under what timelines
• Be specific in the QDRO about cash vs. stock distribution preferences

At PeacockQDROs, we’ve completed many 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. Our clients benefit from deep experience, especially with tricky retirement plan types like ESOPs.

Because ESOPs work differently than other retirement plans, avoid these common QDRO errors:

• Failing to specify whether the alternate payee will receive shares or the cash equivalent
• Not accounting for plan-imposed delays on distributions
• Overlooking the value of diversification elections and how they apply to the alternate payee
• Using language that doesn’t align with annual valuation dates
• Improperly assigning rights under the plan’s put option

Check out our guide on common QDRO mistakes so you can avoid these issues before they cause delays or financial losses.

One of the most common questions we get is: “How long will it take to complete my QDRO?” The answer depends on several factors—including how responsive your divorce attorney and plan administrator are. We’ve outlined the major timing considerations in our article on how long it takes to get a QDRO done.

The takeaway: Start early. ESOP QDROs especially can take longer, and you’ll want any delays to happen before—not after—the court has finalized your decree.

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 First Bank and Trust Company Employee Stock Ownership and Savings Plan, contact PeacockQDROs. We focus on QDROs and have successfully processed many 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.