CourtListener opinion 11288770

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE 
 EASTERN DISTRICT OF TENNESSEE 

In re 
 Case No. 3:24-bk-32128-SHB 
KAITLIN NICOLE WILLIAMS Chapter 7 

 Debtor 

 MEMORANDUM ON TRUSTEE'S OBJECTION 
 TO DEBTOR'S CLAIM OF EXEMPTION 

APPEARANCES: LAW OFFICES OF MAYER & NEWTON 
 John P. Newton, Jr., Esq. 
 1111 Northshore Drive 
 Suite S-570 
 Knoxville, Tennessee 37919 
 Attorneys for Debtor 

 MOSTOLLER, STULBERG, ALLEN, TIPPETT & BANKS 
 Ann Mostoller, Esq. 
 136 South Illinois Avenue 
 Suite 104 
 Oak Ridge, Tennessee 37830 
 Attorneys for Ann Mostoller, Chapter 7 Trustee 

SUZANNE H. BAUKNIGHT 
UNITED STATES BANKRUPTCY JUDGE 
This contested matter is before the Court on the Trustee's Objection to Debtor's Claim of 
Exemption Under T.C.A. § 26-2-111(1)(D) ("Objection") filed by Ann Mostoller, Chapter 7 
Trustee ("Trustee") on October 8, 2025 [Doc. 38], through which the Trustee objects to Debtor's 
claimed exemption of a portion of her former spouse's retirement benefits in the amount of 

$11,000.00 ("Retirement Benefit"). 
The record before the Court consists of six stipulations of fact submitted by the parties on 
December 4, 2025 [Doc. 48], together with five stipulated exhibits: (A) the Final Decree of 
Divorce between Debtor and Tyler James Williams entered in the Chancery Court for Sevier 
County, Tennessee ("Chancery Court") on April 1, 2024 ("Divorce Decree"), with the 
incorporated Marital Dissolution Agreement ("MDA") [Doc. 48-1]; (B) the Qualified Domestic 
Relations Order entered by the Chancery Court on January 3, 2025 ("QDRO") [Doc. 48-21]; (C) 
a letter to Debtor's state-court attorney, Jimmy G. Carter, Jr., from the Administrative 
Committee of UPS 401(k) Savings Plan dated January 15, 2025, recognizing the QDRO (the 
"QDRO Approval Letter") [Doc. 48-3]; (D) Debtor's Second Amended Schedule C filed on 

December 2, 2025, docketed at entry number 47 [Doc. 48-4]; and (E) the Objection, docketed at 
entry number 38 [Doc. 48-5]. Pursuant to Federal Rule of Evidence 201, the Court also takes 
judicial notice of material undisputed facts of record in Debtor's bankruptcy case and has 
considered the Trustee's brief filed on December 5, 2025 [Doc. 49], Debtor's brief filed on 
December 22, 2025 [Doc. 50], and the Trustee's reply filed on January 5, 2026 [Doc. 51]. 
Notwithstanding that the Trustee and Debtor did not identify issues as directed in the 
Order entered on October 30, 2025 [Doc. 40], the Court identifies the determinative issue as 
whether the Retirement Benefit is property of the estate. If so, the issue becomes whether Debtor 

1 Also included as part of Exhibit B is an invoice from Debtor's state court attorneys, Breeding Carter, PC, dated 
January 10, 2025, related to preparation and submission of the QDRO. 
is entitled to her claimed exemption. If, however, the Retirement Benefit is not property of the 
estate, the inquiry ends. See Owen v. Owen, 500 U.S. 305, 308 (1991) ("No property can be 
exempted (and thereby immunized) . . . unless it first falls within the bankruptcy estate.") 
This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (B), and (O). This 
memorandum constitutes the Court's findings of fact and conclusions of law.2 See Fed. R. 

Bankr. P. 7052, 9014(c). 
 I. FACTS 

Debtor and Tyler James Williams were divorced on April 1, 2024. [Docs. 48 at ¶ 1, 48-
1.] Pursuant to their MDA, through which they agreed to an equitable division of their property 
rights, Debtor and Mr. Williams agreed to the following relevant provision: 
5. RETIREMENT BENEFITS: 

a. Wife shall be awarded Eleven Thousand Dollars ($11,000) from Husband's 
401(k) with VOYA, Wife's attorney shall prepare a Qualified Domestic Relations 
Order to effectuate the division of the 401(k). Husband shall provide all information 
necessary for the drafting of the Qualified Domestic Relations Order, and the 
parties shall sign any and all documents required to effectuate the division of the 
account. 
b. Any other benefits presently titled solely in the name of a party will remain that 
party's sole and separate property, and the other shall make no claim against such. 

[Doc. 48-1 at 7.] Neither party appealed the Divorce Decree. [Doc. 48 at ¶ 1.] 
Debtor's counsel prepared and submitted a draft QDRO to the Plan Administrator for 
UPS on December 12, 2024, and to the Chancery Court on December 19, 2024. [Doc. 48-2 at 4.] 
The Chancellor entered the QDRO on January 3, 2025. [Docs. 48 at ¶ 3, 48-2.] On January 15, 
2025, the Administrative Committee for UPS 401(k) Savings Plan emailed Debtor's counsel the 
QDRO Approval Letter, advising that it had reviewed the QDRO and "determined that the Order 

2 To the extent any of the findings of fact are considered conclusions of law, they are adopted as such. To the extent 
any of the conclusions of law are considered findings of fact, they are adopted as such. 
constitutes a qualified domestic relations order . . . within the meaning of Section 206(d)(3) of 
the Employee Retirement Income Security Act of 1974, as amended, and the UPS 401(k) 
Savings Plan." [Docs. 48 at ¶ 4, 48-3.] Relevant to this contested matter, the QDRO states the 
following: 

5. The Alternate Payee [Debtor] shall be entitled to receive an amount which is 
equal to Eleven Thousand Dollars ($11,000) of the Participant's vested account 
balance under the Plan, determined as of April 1, 2024 (the "Valuation Date"), as 
if the Participant separated from service on that date. The amounts awarded to the 
Alternate Payee shall be credited or debited with investment gains and losses from 
the Valuation Date through the date said amounts are distributed to the Alternate 
Payee. Investment gains and losses shall be calculated in accordance with the terms 
of the Plan. 

. . . . 

7. The amounts awarded hereunder shall be paid to the Alternate Payee in a lump 
sum payment, as soon as practicable following the date this Order is determined by 
the Plan to be a qualified domestic relations order (within the meaning of Section 
206(d) of ERISA). 

. . . . 

9. It is intended that this Order will qualify as a qualified domestic relations order 
under Section 206(d)(3) of ERISA, and shall be administered and interpreted in 
conformity with such Act. This Order does not require the Plan to provide any type 
or form of benefit or any option not otherwise provided to the Participant under the 
Plan. This Order further does not require the Plan to provide increased benefits 
(determined on the basis of actuarial value) and does not require the payment of 
benefits to an Alternate Payee which are required to be paid to another Alternate 
Payee under another order previously determined by the Plan to be a QDRO. 

[Doc. 48-2 at ¶¶ 5, 7, 9.] 
Debtor filed the Voluntary Petition commencing this Chapter 7 bankruptcy case on 
December 9, 2024. [Docs. 1, 48 at ¶ 2.] On September 10, 2025, Debtor filed an Amended 
Schedule C, reflecting, inter alia, an exemption in the Retirement Benefit as "401(k); UPS 
401(k)" in the amount of $11,000 pursuant to Tennessee Code Annotated section 26-2-
111(1)(D). [Doc. 35.3] The Trustee timely objected to the amended exemption on the basis that 
"the fund which is the subject of the claim of exemption was not property of the debtor at the 
time she filed bankruptcy." [Doc. 38.] Debtor further amended Schedule C on December 2, 
2025, to add Tennessee Code Annotated sections 26-2-103 and -105 and 11 U.S.C. § 

522(b)(3)(C) as additional statutory bases for exempting the Retirement Benefit. [Doc. 48 at ¶ 5.] 
The parties stipulated that the Trustee's Objection applies to the Second Amended Schedule C. 
[Doc. 48 at ¶ 6.] 
In her brief, the Trustee relies on the unpublished decision by Judge Richard Stair, Jr. in 
In re Rimmer, No. 01-30221 (Bankr. E.D. Tenn. June 15, 2001) [Doc. 49-1], in which he 
sustained the chapter 7 trustee's objection to the debtor's claimed exemption, found that the 
debtor was not a "participant in or beneficiary of" her former spouse's retirement account 
because a QDRO was not in place as of the petition date so that under Tennessee Code 
Annotated sections 26-2-105(b) and (c) (2000)4, the debtor did not satisfy the statutory language. 
[Id. at 4, 6.] 

Debtor argues that the Retirement Benefit is not property of the estate under 11 U.S.C. § 
541(c)(2) and Patterson v. Shumate, 504 U.S. 753 (1992), and that the Trustee's reliance on In re 
Rimmer is misplaced. She asks that In re Rimmer "be revisited and overturned to the extent it 
applies to the facts of this case" because "it was based on a technical reading by the Court of . . . 
[Tennessee Code Annotated section] 26-2-105, as opposed to the ‘form over substance' of the 
property rights and exemptions at the time of the Petition." [Doc. 50 at 3.] In the alternative, 

3 Debtor filed an Amended Schedule C originally on August 20, 2025 [Doc. 31], but later withdrew that document on 
September 10, 2025 [Doc. 34]. 

4 For all practical purposes, the language of these statutes providing exemptions for retirement plans that fall within 
the scope of ERISA and QDROs remains unchanged in the current statute. 
Debtor argues that exemptions are liberally construed in favor of debtors, and if the Court finds 
that the Retirement Benefit is property of the estate, she is entitled to exempt the Retirement 
Benefit under 11 U.S.C. § 522(b)(3) and Tennessee Code Annotated sections 26-2-103, -105(b), 
and -111. 

As previously stated, the threshold issue is whether the Retirement Benefit is property of 
the estate. Because the Court finds that the Retirement Benefit is not property of Debtor's 
bankruptcy estate, the exemption issue is moot, and the Trustee's objection will be overruled. 
 II. ANALYSIS 

Debtor's bankruptcy estate, which included all of her property and property interests at 
the time, was created when she filed her bankruptcy case. 11 U.S.C. § 541(a). The scope of the 
definition of "property of the estate" under § 541(a) "includes all kinds of property, including 
tangible or intangible property," and is intended to be broad. United States v. Whiting Pools, Inc., 
462 U.S. 198, 205 n.9 (1983). Section 541 includes in property of the estate even property that is 
subject to a restriction on the transfer of the debtor's interest. 11 U.S.C. § 541(c)(1). Debtor 
argues that the Retirement Benefit is not property of the estate5 under subsection (c)(2), which 
expressly provides that "[a] restriction on the transfer of a beneficial interest of the debtor in a 
trust that is enforceable under applicable nonbankruptcy law is enforceable in a case under this 
title." 11 U.S.C. § 541(c)(2); see Patterson, 504 U.S. at 758 ("The natural reading of the 

5 That Debtor listed the Retirement Benefit in her statements and schedules does not control whether it is property of 
the estate because debtors are required to schedule all interests that they hold in all property or face the consequences 
imposed by 11 U.S.C. § 727(a)(4) for failing to disclose them. See Home Serv. Oil Co. v. Cecil (In re Cecil), 542 B.R. 
447, 454 (B.A.P. 8th Cir. 2015) (stating that "questions of whether bank accounts and other assets titled in a debtor's 
name are, or are not, property of the estate are not questions a debtor should decide[; r]ather those questions are plainly 
and fundamentally issues to be determined by a trustee or the court"). 
provision entitles a debtor to exclude from property of the estate any interest in a plan or trust 
that contains a transfer restriction enforceable under any relevant nonbankruptcy law.").6 
The QDRO Approval Letter recognized the parties' QDRO and makes clear that Mr. 
Williams's 401(k) plan from which Debtor was awarded the Retirement Benefit is an ERISA-

qualified plan. [Doc. 48-3.] Accordingly, there is no dispute that the plan from which the 
Retirement Benefit arose falls within the scope of § 541(c)(2) and Patterson. The question, then, 
is whether Debtor's interest in the Retirement Benefit at the time she filed her petition was 
property of the bankruptcy estate. For this question, the Court finds persuasive the decision of 
the United States Bankruptcy Court for the Northern District of Ohio in Corzin v. Lawson (In re 
Lawson), 570 B.R. 563 (Bankr. N.D. Ohio 2017), in which the bankruptcy court determined 
what legal or equitable interests the debtor had as of the petition date and what interests became 
property of the estate in connection with the debtor's "share of her [former] husband's retirement 
account after filing a divorce action but before effectuating a division of that account via a 
transfer of assets authorized by the entry of a QDRO." Id. at 570. 

In In re Lawson, the debtor filed her bankruptcy case on March 20, 2015. Id. at 569. Two 
months earlier, on January 6, 2015, the state court held a hearing in the pending divorce between 
the debtor and her then-husband. Id. at 568. At that hearing, the court read into the record the 
terms of the settlement agreement between the debtor and her spouse, which included an equal 
division of the husband's 403(b) retirement account. Id. On January 8, the state court entered an 
order styled as a "Judgment Entry" stating that "the proposed shared parenting plan and 

6 Interpreting whether § 541(c)(2) included ERISA-qualified plans, the Supreme Court relied on the plain language of 
the statute itself: "Nothing in § 541 suggests that the phrase ‘applicable nonbankruptcy law‘ refers, as petitioner 
contends, exclusively to state law. The text contains no limitation on ‘applicable nonbankruptcy law‘ relating to the 
source of the law." Patterson, 504 U.S. at 758. Because ERISA-qualified plans include the requisite anti-alienation 
language contemplated by Congress, a debtor's interest in such plans is excluded from property of the bankruptcy 
estate under § 541(c)(2). Id. at 761-62, 765. 
separation agreement are approved, adopted, and incorporated into the final decree. The final 
decree and shared parenting plan shall be filed within 21 days." Id. at 569 (citation omitted). As 
of the March 20 petition date, neither party had filed the documents as directed by the state court. 
Id. In the debtor's chapter 7 case, the trustee filed an adversary proceeding, arguing the 

following with respect to the ex-husband's 403(b) retirement account: 
[The state court] had entered an order styled as a "judgment entry" approving a 
property settlement between the Debtor and her husband, but not a formal qualified 
domestic relations order ("QDRO") as defined in the Employee Retirement Income 
Security Act, 29 U.S.C. §§ 1001–1461 ("ERISA") . . . [, and the trustee could] stand 
in the shoes of the Debtor and ultimately receive the Debtor's share of the funds 
from the Plan upon completion of the divorce without running afoul of either the 
ERISA-required anti-alienation provision of the Plan itself or the exemptions 
applicable to qualified tax-advantaged retirement accounts under Ohio and federal 
bankruptcy law. 

Id. at 566. 
The court examined "the distinct forms of interest" that each party argued the debtor held 
in the 403(b) retirement account as of the petition date. Id. at 570. The court initially looked to 
whether the debtor held "a beneficial interest in the Plan assets, either by virtue of her 
designation by [the ex-husband] as a beneficiary, her status as [his] spouse, and/or the entry by 
the State Court of its January 8, 2015 Judgment Entry, which approved the division of the Plan 
assets." Id. "The proper legal characterization of these distinct rights," the court stated, "informs 
the further inquiries about what is or is not excluded from property of the bankruptcy estate and 
what property of the bankruptcy estate is exempt." Id. 
First, the court found that the state court's "Judgment Entry" was a "domestic relations 
order" because it was signed by the state court judge, it granted the parties' a divorce after 
approving and adopting the proposed settlement and property division agreement that had been 
read into the record, and the order did not include any stay of its effectiveness pending entry of a 
final decree. Id. The bankruptcy court next found that the state court's Judgment Entry fully 
vested the debtor with rights of a beneficiary in her ex-husband's 403(b) retirement account no 
later than January 8, 2015, because "[a] domestic relations order is a sufficient independent basis 
for a spouse to obtain a vested beneficial interest in an ERISA-qualified plan." Id. at 572. 

Stating that "ERISA does not distinguish between final decrees and other domestic relations 
orders [but] distinguishes only between domestic relations orders and qualified domestic 
relations orders," the court recognized that vesting occurs even while the plan administrator is 
reviewing the domestic relations order to determine if it constitutes a QDRO. Id. at 571, 572 
(citations omitted). The court summarized the differences as follows: 
A domestic relations order, therefore, vests the spouse with rights protected by 
ERISA. The QDRO, by contrast, is necessary to take the next step of transferring 
the assets into the spouse's name in her own qualified plan or individual retirement 
account. As explained by the Ninth Circuit Court of Appeals, "[t]he QDRO 
provisions of ERISA do not suggest that [an alternate payee] has no interest in the 
plans until she obtains a QDRO, they merely prevent her from enforcing her interest 
until the QDRO is obtained." In re Gendreau, 122 F.3d 815, 819 (9th Cir. 1997). 

Id. at 572. Accordingly, because the debtor "became an ERISA-qualified beneficiary" when the 
state court entered the Judgment Entry, her beneficial interest in her ex-husband's 403(b) 
retirement plan was excluded as property of the estate by § 541(c)(2) and Patterson. Id. at 575.7 
Accord In re Jeffers, 572 B.R. 681, 689 (Bankr. N.D. Ohio 2017) ("[T]he lack of a QDRO in no 
way prevents the vesting of the parties' property rights."). 

7 Notably, the Lawson court also found that the ex-husband's "designation of the Debtor as beneficiary and the self-
executing spousal beneficiary designation provisions of the Plan as required by ERISA" was another ground for 
deeming the debtor's interest as excluded from property of the estate under § 541(c)(2). Id. at 575 (emphasis added). 
Here, the record does not contain information that Debtor was designated as a beneficiary of her ex-husband's 401(k) 
plan, but ERISA requires such a designation absent an express waiver. See 29 U.S.C. § 1055(c)(2)(A); In re Lawson, 
572-73 (finding that the debtor was "already a beneficiary of the plan before obtaining a QDRO because she was a 
named beneficiary and because ERISA requires spouses to be beneficiaries in qualified retirement plans unless those 
rights are expressly waived." (citation modified)). 
Also persuasive is the reasoning in In re Myatt, No. 23-50239, 2023 WL 5761917 
(Bankr. M.D.N.C. Sept. 6, 2023). Addressing analogous questions in a nearly identical 
procedural posture, the bankruptcy court for the Middle District of North Carolina examined 
whether a debtor's interest in her former spouse's 401(k) account was exempt. There, the 

consent order for divorce was final prepetition with an agreed division of marital property that 
awarded the debtor a distributive award from the ex-spouse's retirement account to be paid 
through a QDRO. See id. at *1. The chapter 7 trustee objected to the debtor's claimed exemption, 
arguing that the debtor did not own any interest in the distributive award from her former 
spouse's 401(k) account arising from the consent order or, in the alternative, that even if the 
consent order granted the debtor an ownership interest in the distributive award, it was 
ineffective without a QDRO. Id. at *2. 
The bankruptcy court disagreed, holding that under North Carolina law: 
A final order resolving an equitable distribution proceeding . . . fixes the parties' 
rights and transforms the more general right to equitable distribution into concrete 
interests in specific property. After being signed and entered by the trial court, an 
equitable distribution order such as the Consent Order is treated as an award under 
N.C. Gen. Stat. § 50-20.1 and each spouse's interests "vest" on the date of the 
order's entry. 

The entry of an equitable distribution order, therefore, represents a key moment in 
a divorce-related division of property interests. If the Debtor and her ex-spouse 
were separated and still in the midst of a pending proceeding, the Trustee may be 
correct that the Debtor would merely possess a claim or right to equitable 
distribution rather than an interest in specific property. However, in this case the 
Debtor has already concluded the proceeding through entry of the Consent Order. 
The Debtor's interest is no longer an amorphous, unknown claim to as-yet-
undivided marital property; rather, the Debtor's interests are now explicated and 
firmly fixed in the Consent Order. The terms of the Consent Order, signed and 
entered by the state court [prepetition], "constitute a full and final resolution of the 
Debtor's claims for Equitable Distribution, Post-Separation Support/Alimony and 
Attorney Fees, and [the ex-spouse's] claims for Equitable Distribution." 

Id. at *3-4 (citation modified). 
Concerning the trustee's argument that the lack of a prepetition QDRO affected the 
debtor's ownership as of the petition date, the bankruptcy court concluded that it did not, 
explaining that under both federal and state law, a QDRO is only a procedural device, not the 
mechanism by which property interests are vested: 

Although the Trustee is correct that the Consent Order would not qualify as a 
QDRO, that fact does not preclude a finding that the Consent Order vested the 
Debtor's ownership interest in . . . the 401(k) account. Rather, the division of the 
parties' property interests were completed upon entry of the Consent Order; the 
envisioned QDRO is merely a procedural device for implementing the terms of that 
Consent Order. James R. Turner, 2 EQUITABLE DISTRIBUTION OF 
PROPERTY § 6:20 (4th ed. 2023). 

State courts have adopted a two-pronged approach to dividing retirement benefits 
as part of an equitable distribution of marital property—"[t]he first order is the 
underlying substantive order stating the rights of the parties to the retirement 
benefits at issue," while the second "is a DRO – a separate order aimed at the plan 
administrator, directing it to send a separate benefit check to the nonowning 
spouse." Id. This divided approach reflects a deliberate choice made by state courts. 
Attempting to draft the initial substantive order to also meet the requirements of a 
QDRO "is rarely advisable, as such an order will contain many terms involving 
other assets and issues" and may simply "confuse the plan administrator, who could 
respond by refusing to qualify the order." Id. Instead, "the best procedure is almost 
always to draft the DRO as a separate document, focusing only upon dividing 
retirement benefits in a form which the plan administrator will recognize." In line 
with this rationale, a "majority of states" adhere to the "general rule in modern 
practice" that a DRO "is not a substantive order at all" but is instead "a procedural 
device for enforcing the terms of the underlying substantive order." Id. (citing 
White v. White, 568 S.E.2d 283, 285 (N.C. Ct. App. 2002), aff'd, 579 S.E.2d 248 
(N.C. 2003)). As the Ninth Circuit Court of Appeals remarked, "the QDRO 
provisions of ERISA do not suggest that [the alternate payee] has no interest in the 
plan [ ] until she obtains a QDRO, they merely prevent her from enforcing that 
interest until the QDRO is obtained." Trs. of Dirs. Guild of Am.-Producer Pension 
Benefits Plans v. Tise, 234 F.3d 415, 421 (9th Cir. 2000) (quoting In re Gendreau, 
122 F.3d 815, 819 (9th Cir. 1997)). 

Id. at *5 (alterations in original). 
Having found that the debtor was a fully vested owner in the 401(k) award, the Myatt 
court then found that the funds were not property of the estate under § 541(c)(2) and Patterson: 
In interpreting the language of 11 U.S.C. § 541(c)(2), the Supreme Court confirmed 
that a debtor may exclude from property of the estate any interest – as a plan 
participant – in a plan or trust that includes a restriction on transfer enforceable 
under nonbankruptcy law, including an ERISA-qualified plan. Patterson, 504 U.S. 
at 758. Similarly, despite some disagreement, "most courts addressing the issue 
have determined that a debtor's interest as an alternate payee in the undistributed 
funds of an ERISA-qualified plan is not property of the bankruptcy estate." In re 
Dyckman, No. 1:10-bk-08586-MDF, 2012 WL 1302613, at *4 (Bankr. M.D. Pa. 
Apr. 16, 2012) (citing Nelson v. Ramette (In re Nelson), 322 F.3d 541, 545 (8th Cir. 
2003)). Under this line of reasoning, "therefore, a person who acquires an interest 
in an ERISA plan via a QDRO can exclude that interest from a bankruptcy estate 
in the same way that the plan participant himself could have excluded it." Nelson, 
322 F.3d at 545; see also Ostrander v. Lalchandani (In re Lalchandani), 279 B.R. 
880 (B.A.P. 1st Cir. 2002); In re Farmer, 295 B.R. 322, 324-25 (Bankr. W.D. Wis. 
2003); In re Hthiy, 283 B.R. 447, 451 (Bankr. E.D. Mich. 2002)[8]; In re Seddon, 
255 B.R. at 819. Because the QDRO is merely a procedural device, courts have 
also found that a debtor's interest is excluded even in the absence of a QDRO, 
where an equitable distribution order or divorce decree establishes the debtor's 
interest. See, e.g., Cooper v. Childon (In re Chilson), No. 1:15-cv-00020-MR, 
Bankr. Case No. 12-10848, 2016 WL 1079149, at *5-6 (W.D.N.C. Mar. 18, 2016); 
Walsh v. Dively (In re Dively), 551 B.R. 570, 575-76 (W.D. Pa. 2016); Wilson v. 
Wilson (In re Wilson), 158 B.R. 709, 711 (Bankr. S.D. Ohio 1993). 

Id. at *7 (citation modified). 
Application of Tennessee law results in the same determination. In Tennessee, "[a] Final 
Decree of Divorce that incorporates the spouses' marital dissolution agreement is ‘the 
controlling document that sets forth the division of property.'" Pruitt v. Pruitt, 293 S.W.3d 537, 
542 (Tenn. Ct. App. 2008) (citation omitted). Under Tennessee Code Annotated, "‘[m]arital 

8 In In re Hthiy, Judge Steven Rhodes found that the debtor's undistributed interest in her ex-spouse's retirement plan 
was not property of the estate under § 541(c)(2) and looked to the purposes of ERISA's QDRO provisions: 

In creating the QDRO mechanism Congress was careful to provide that the alternate payee, the 
"spouse, former spouse, child, or other dependent of a participant," is to be considered a plan 
beneficiary. 29 U.S.C. § 1056(d)(3)(K), (J). These provisions are essential to one of REA's 
[Retirement Equity Act of 1984, Pub. L. 98-397, 98 Stat. 1426] central purposes, which is to give 
enhanced protection to the spouse and dependent children in the event of divorce or separation, and 
in the event of death the surviving spouse. Apart from these detailed provisions, ERISA does not 
confer beneficiary status on nonparticipants by reason of their marital or dependent status. . . . The 
QDRO provisions protect those persons who, often as a result of divorce, might not receive the 
benefits they otherwise would have had available during their retirement as a means of income. 

In re Hthiy, 283 B.R. at 449-50 (citation modified) (quoting Boggs v. Boggs, 520 U.S. 833, 846-47 (1997)). 
property' includes the value of vested and unvested pension benefits, vested and unvested stock 
option rights, retirement, and other fringe benefit rights accrued as a result of employment during 
the marriage." Tenn. Code Ann. § 36-4-121(b)(2)(B)(ii). After a court awards one party to a 
divorce a portion of the other spouse's retirement or pension benefits in a divorce decree, entry 

of a QDRO is necessary to "allow[] an alternate payee to receive all or a portion of the benefits 
payable to a participant under a private pension plan." Mpoyi v. Mpoyi, No. M2018-01816-COA-
R3-CV, 2020 WL 957650, at *2 (Tenn. Ct. App. Feb. 27, 2020). 
"Typically, in Tennessee, a proposed QDRO is prepared by the parties' attorneys and 
submitted to the trial court for approval and entry, after which, it is submitted to the 
administrator who administers the pension plan in question." Jordan v. Jordan, 147 S.W.3d 255, 
260 (Tenn. Ct. App. 2004) (footnote omitted). "The purpose of the QDRO is to allow [one 
former spouse] to reach the [other former spouse's] interest in the 401(k) plan as allowed by 
[ERISA]." Lagrone v. Lagrone, No. 01A01–9603–CH–00125, 1996 WL 512032, at *3 (Tenn. 
Ct. App. Sept. 11, 1996). "Notwithstanding their importance, issues and practice surrounding 

QDROs can give rise to contentious proceedings after a judgment of absolute divorce has been 
granted, because ‘ERISA does not necessarily require that a QDRO be part of the actual 
judgment in a case.'" Stiel v. Stiel, 348 S.W.3d 879, 892 (Tenn. Ct. App. 2011) (citation 
omitted). Nor is there a "statute of limitation for the entry of a QDRO . . .[; however, b]efore an 
alternate payee becomes entitled to rights under an ERISA plan, the proposed QDRO must be 
qualified." Jordan, 147 S.W.3d at 260. Accordingly, a "judgment of divorce [awarding such 
benefits] ‘create[s]' [the former spouse's] right to receive benefits under [the other spouse's] 
plan . . . [and a] proposed QDRO simply ‘recognizes' that right." Jordan, 147 S.W.3d at 261 
(citing 29 U.S.C. § 1056(d)(3)(B)(i)(I)).9 
Tennessee courts also have held that any subsequent documents, including QDROs, may 
not alter or amend the final divorce decree. 

As this court has stated in several opinions, parties may not amend the terms of the 
property division in a final judgment by a subsequent agreement, such as a QDRO. 
Cook v. Cook, No. E2007–00750–COA–R3–CV, 2008 WL 555692, at *7 (Tenn. 
Ct. App. Feb. 29, 2008); see Maxwell v. Maxwell, No. 01A01–9402–CV–00086, 
1994 WL 527134, at *2 (Tenn. Ct. App. Sept. 28, 1994) (vacating a QDRO that 
was ordered by the court after the divorce decree had become final because the 
QDRO was inconsistent with the parties' divorce decree); see also Lagrone, 1996 
WL 512032, at *3 (vacating a QDRO that did not conform to the provisions of the 
Final Decree of divorce which had become final before the QDRO was entered). 

Pruitt, 293 S.W.3d at 544; see also Watson v. Clark, No. M2003-02398-COA-R3-CV, 2005 WL 
856083, at *4 (Tenn. Ct. App. Apr. 13, 2005) ("The intent of [a] QDRO is to recognize the 
existence of the marital rights awarded to [the former spouse] by the Final Decree of Divorce and 
. . . should not be construed in any manner inconsistent with any ‘applicable judicial decision." 
(citation modified)); Gose v. Gose, No. 03A01-9506-CH-0268, 1997 WL 129367, at *2 (Tenn. 
Ct. App. Mar. 24, 1997) ("Because of the different circumstances in which a QDRO may prove 
necessary, it is not essential that such an order be part of the judgment in the action. For one 
thing, the Federal law does not require that a QDRO be part of the actual judgment in the case. . . 
. In this case, the divorce decree as to pension benefits, could not have been enforced without 
the QDRO, and the QDRO was necessary as an aid to enforcing the previously entered 
judgment." (citation omitted)); cf., In re Estate of Todd, No. W2018-01088-COA-R3-CV, 2019 
WL 1036080, at *4 (Tenn. Ct. App. Mar. 5, 2019) (finding that even though the divorce decree 

9 The Jordan court cited Duhamel v. Duhamel, 753 N.Y.S.2d 673, 674 (N.Y. Sup. Ct. 2002), which "characterized 
‘an action to compel entry of QDRO' as one ‘to compel the other [spouse] to perform a mere ministerial task necessary 
to distribute funds previously allocated by the parties' own binding agreement.'" Id. at 262. 
had been rejected as a QDRO by the plan administrator, "the language in the Divorce Decree 
makes it clear that the trial court intended Claimant to be an alternate beneficiary of the plan," 
and she was entitled to the portion awarded under the decree). 
The Trustee argues that the facts of In re Rimmer are identical to the facts of this case. 

The Court, however, observes two seminal distinctions. First, in Rimmer, the court found that 
the record failed to establish that the debtor was either a participant or a beneficiary to her former 
spouse's 401(k) plan. In re Rimmer, No. 01-30221, at 4. More determinative, however, is that 
the question of whether the retirement funds in question in In re Rimmer were property of the 
estate was not raised or addressed.10 
Other cases relied on by the Trustee in her reply likewise are inapposite or unavailing. 
For example, the Trustee argues that the bankruptcy court in In re West, 507 B.R. 252 (Bankr. 
N.D. Ill. 2014), "ruled . . . that a QDRO was required and because one had been entered, the 
debtor's interest in the Retirement Plan at issue was property of the estate." [Doc. 51 at 1.] In In 
re West, however, the parties provided the court with "no evidence" that the retirement plan 

contained a restriction on transfer; in fact, "neither party . . . provided the court with the 
Retirement Plan itself" so that the court could not analyze and determine whether the plan 
"contain[ed] an enforceable transfer restriction under applicable nonbankruptcy law." Id. at 257. 
The Court also disagrees with the Trustee's assertion that "cases cited by the Debtor in 
her brief in this case clearly require that a QDRO be entered." [Doc. 51 at 2.] To the contrary, in 
Ostrander v. Lalchandani (In re Lalchandani), 279 B.R. 880 (B.A.P. 1st Cir. 2002), cited by 
Debtor [Doc. 50 at 3], the BAP affirmed the bankruptcy court's determination that the payment 

10 To the extent that this opinion is in conflict, the Court respectfully declines to follow In re Rimmer. As stated, the 
issue of whether the retirement benefit in that case was property of the estate was not addressed. Further, as illustrated 
by the numerous cases cited herein, the law concerning the treatment of rights under a QDRO in bankruptcy has been 
clarified in the intervening twenty-five years since Rimmer was decided. 
owed to the debtor as alternative payee under her former spouse's pension plan was not property 
of the estate under § 541(c)(2) even though she filed her case five days before the parties' 
separation agreement and QDRO were entered by the state court. In doing so, the panel rejected 
the chapter 7 trustee's argument that Patterson did not apply because the debtor's interest in the 

pension plan emanated from the QDRO. Id. at 884. The panel instead relied on Nelson v. 
Ramette (In re Nelson), 274 B.R. 789 (B.A.P. 8th Cir. 2002),11 and determined "that the 
beneficiaries under an ERISA-qualified retirement plan who are entitled to the protection of the 
anti-alienation provision include a plan participant's ex-spouse who is made an alternate payee 
of the plan pursuant to a qualified domestic relations order" and that a debtor's undistributed 
interest in a former spouse's ERISA-qualified retirement plan obtained pursuant to a QDRO is 
not property of the bankruptcy estate. Id. at 885-86.12 
Here, the Retirement Benefit indisputably is an ERISA-qualified plan. [See Doc. 48-3.] 
The parties also have stipulated that Debtor was awarded the Retirement Benefit through the 
parties' Divorce Decree incorporating the MDA, which was not appealed. [Docs. 48 at ¶ 1, 48-
1.] When that judgment became final under Tennessee law on May 1, 2024,13 Debtor had a fully 

vested interest in the Retirement Benefit, notwithstanding that the QDRO – which was merely a 

11 The In re Nelson court relied heavily on the Supreme Court's decision in Boggs. In re Nelson, 274 B.R. at 794-96. 

12 The Trustee also cited to In re Remia, 503 B.R. 6 (Bankr. D. Mass. 2013), as exemplary of when a court allowed an 
exemption based solely on a separation agreement without a QDRO; however, in that case, the issue of whether 
retirement funds awarded under a divorce judgment were property of the estate was not raised. Instead, the bankruptcy 
court disagreed with the chapter 7 trustee's contention that the debtor was not a beneficiary to the retirement plan 
absent a QDRO and overruled the objection. Id. at 12. In fact, the court expressly found that "Section 522(d)(12) of 
the Bankruptcy Code requires only that funds be in a fund or account exempt from taxation. There is no question that 
in the absence of a QDRO, the Retirement Funds have not moved from the Retirement Plan. The Bankruptcy Code 
does not appear to require, nor has the Trustee cited any authority to support the proposition, that the Retirement Funds 
be held in an account belonging to the Debtor." Id. 

13 Parties to a judgment have thirty days to appeal as a matter of right. Tenn. R. App. P. 4(a). 
procedural device for implementing the Divorce Decree – was not issued until postpetition.14 
Under federal and Tennessee law, Debtor held a beneficial interest in the Retirement Benefit, 
which is a trust for which the transfer is restricted and enforceable under applicable 
nonbankruptcy law (i.e., an ERISA-qualified plan). Accordingly, Debtor's interest in the 
Retirement Benefit is not property of the bankruptcy estate under § 541(c)(2) and Patterson.15 

 III. CONCLUSION 
Because the Court finds that the Retirement Benefit is not property of Debtor's 
bankruptcy estate, the Trustee's Objection will be overruled. The Court will enter an Order 
consistent with this Memorandum. 

FILED: March 26, 2026 

 BY THE COURT 

 s/ Suzanne H. Bauknight 

 SUZANNE H. BAUKNIGHT 
 UNITED STATES BANKRUPTCY JUDGE 

14 As summarized by the Tennessee Court of Appeals, "regardless of whether the parties agree to a division or the 
court has to decree one, an order must be entered memorializing the division [and e]ven assuming the valid entry of 
an appropriate order, that order cannot be enforced in the absence of action by the plan administrator. . . [; however,] 
the approval of [a] QDRO is adjunct to the entry of the judgment of divorce and not an attempt to ‘enforce' the 
judgment . . . [but] is an essential act to bring to fruition the trial court's [divorce] decree [concerning the division of 
retirement plan assets]." Jordan, 147 S.W.3d at 262. 

15 As previously stated, because the Retirement Benefit is not property of the estate, the exemption question is moot.