Ten Must-Dos After Your Divorce

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Divorce must-do list by Nancy Stassinopoulos, Certified Family Law Specialist
Nancy Stassinopoulos, APC

Many couples think their case is over on the date they sign their Marital Settlement San Diego divorce attorney Nancy StassinopoulosAgreement. This is a momentous occasion, especially in a collaborative case where the entire team usually meets in a conference room to review and sign the final documents. Emotions can run high, ranging from tears to smiles of happiness that a divorce has been concluded with dignity and respect.

But wait, before you break out the champagne to celebrate with your friends, there’s more to be done. Here are ten important reminders:

  • Finish your QDROs. If your Marital Settlement Agreement provides for retirement accounts and pension plans to be divided by a Qualified Domestic Relations Order, you should start working with the QDRO attorney or QDRO preparation service recommended by your collaborative attorney. In fact, most collaborative attorneys recommend that the couple start the QDRO drafting process before the Marital Settlement Agreement is signed, so that the QDROs can be signed and submitted to the court with the Judgment. Then, you need to make sure that the QDRO is served on the Plan.
  • Divide Your IRAs. The division of Individual Retirement Accounts is usually spelled out in the Marital Settlement Agreement, either as a formula (one-half to each spouse) or a dollar amount to one spouse. The division of IRAs does not require a QDRO. However, you need to contact the custodian of the IRA to request forms for the transfer of the funds, which can be rolled over into the transferee’s IRA without tax consequences. Your Collaborative Attorney or Financial Specialist will assist you if you need help.
  • Change your estate plan. You should make an appointment with an estate planning attorney. If you and your spouse had an estate plan, such as a family trust or wills, be aware that the divorce will automatically revoke any wills or trusts that were in existence on the date of the divorce. Thus, you will need to make a new estate plan. If you fail to do so, and then pass away, the laws of the State of California will decide how to distribute your assets. Also, probate fees for those who die “intestate” (without a will) are costly.   You can leave more money to your heirs with a good estate plan.
  • Check your life insurance. You should review and change the beneficiaries on your life insurance policies, to conform to the Marital Settlement Agreement. Remember, life insurance is not controlled by a will or trust. All beneficiary changes must be made in writing.
  • Change retirement plan beneficiaries. You will need to change the beneficiaries on your Individual Retirement Accounts, 401(k) Plans, and pension plans, to conform to the Marital Settlement Agreement. If these accounts will be divided between you and your spouse, you will need to get that done before you can change the beneficiaries. All beneficiary changes must be made in writing, usually on a form provided by the company.
  • Change your powers of attorney. During marriage, you might have given your spouse a financial power of attorney, or a power of attorney for health care. Be sure to revoke those documents and create new ones. Your estate planning attorney can assist you.
  • Close all joint credit card accounts. Remember, on a true joint credit account, both you and your spouse remain liable for any future charges, even after your divorce is final. If you are not sure whether an account is a true joint account, as opposed to one on which your spouse is an authorized user, call the card issuer and ask.
  • Close all joint bank and financial accounts. Most banks and financial institutions will require both account holders to authorize the account closure.
  • Copy your family photos and videos. Usually the Marital Settlement Agreement will provide that family photos and videos will be copied, with the expense to be shared. Be sure to make these arrangements as soon as possible.
  • Change the passwords on all accounts. If your spouse had access to your online financial or credit card accounts, you will have to change your passwords. Remember, your ex-spouse may be able to answer security questions such as your mother’s maiden name, and obtain access to your accounts after the divorce.

This list may seem overwhelming. It is a lot of work to address these important details. But think about how much work you have already done, to get to this point in the divorce process. Don’t let it all unravel because an important detail was not addressed.

Here’s a tip: Start with the tasks you can accomplish quickly. Tackle the tasks one at a time, check them off as you complete them, and move on to the next one. You will have all this work done in no time. Then you’ll be able to relax, knowing that your future, and your family’s future, will be secure.

 

Broken Trust: Advice About Estate Planning During A Divorce

by Meredith L. Brown, Esq.
Brown & Brown

Many couples prepare Wills and Trusts in connection with a happy life event, such as the birth of a child. Frequently these documents are placed in a safe deposit box, never to be updated or even thought about again.

When the unfortunate life event of divorce happens, couples often opt to defer consideration of their old estate planning. No one wants to think about their mortality on a good day, much less when divorce is on their mind. This decision is understandable, but it is probably unwise and potentially costly.

First, a note of caution: if a Petition to dissolve the marriage has already been filed, the law requires that specific steps be taken before changes are made to Wills and Trusts. Similarly, there is an automatic restraint against making changes to beneficiary designations on any insurance. Couples must be sure to comply with these rules.

Family law does not place restrictions on changes to your Advance Health Care Directive after you have filed for divorce. Most couples designate their spouse as their legal voice when it comes to treatment and end of life decisions. Even in divorce situations where couples are amicable, it may not be appropriate for a soon-to-be ex spouse to make these decisions in the midst of a divorce.

How do you decide whether to change your existing estate plan?

The first (and obvious) step is to read and understand your documents. Most couples prepare documents that leave the estate to the survivor between them. Then, ultimately, the estate goes to their children. But this is not always the case, particularly in second marriages.

If you acquired assets after your Trust was created (for example a new home), determine whether title was taken in the name of your Trust. If you hold assets outside of your Trust, you could have the cost of a probate proceeding.

Even if you haven’t done any estate planning but own real estate or other titled assets with your spouse, be sure to check the deed or other title documents. Certain forms of title such as joint tenancy carry with them an automatic right of survivorship. You should consider whether you wish to change the form of title to one without survivorship rights. But before you make any changes, be sure to comply with the notice requirements mandated by law.

Second, ask yourself:  if you were hit by the proverbial truck before your divorce is final, would you want your spouse to receive your share of the estate? If you have children, do you trust that your former spouse will preserve your share of the estate so that your children ultimately receive everything? Would you feel differently if your former spouse sold the marital residence? What if he or she remarried?

Keep in mind that even if you decide to change your estate planning by preparing new Wills and Trusts, your former spouse may still have control over assets you leave to your children, if they are still under age 18. If you do not wish for this to happen, you will need to designate someone else as the guardian of the estate of your children.

As you may guess, determining how your assets are distributed upon your death can be complicated like many other aspects of your life when you file for divorce.  But this is something you need to address for the well-being of yourself and your children. You don’t have to go it alone.  Investing in the advice of an attorney with expertise in estate planning as well as a skilled financial specialist is an investment well worth making.

If you pursue a Collaborative Divorce, a financial specialist is part of your divorce team.  This can be extremely helpful if you are also working through a complex estate plan. It’s another smart reason to consider the Collaborative Process for your divorce.