Tuesday, March 1, 2011

Dealing With Financial Issues Long After the Divorce is Final?

Although a final divorce decree is supposed to “split” the property once and for all that is not always the case.

There are a variety of reasons why a couple may find themselves dealing with property issues months or years after the final decree has been signed.  Here are some of the most common:


Retirement assets (401K, private and governmental retirement benefits and accounts, etc.)   Some of these accounts cannot truly and finally be ‘split’ until the retirement actually occurs.  Even if the paperwork is done at the time of divorce and is submitted to the benefits department or managing investment company, there can be additional steps before the benefits or funds are cleared for release.  Specific court orders for this purpose (called “QDROs” for Qualified Domestic Relation Orders”) are usually required.  Requirements for allocation of retirement benefits vary from company to company and these QDROs can become quite complicated at times.  Because this issue can also become time-consuming, some couples who are anxious to be finished with the divorce process decide to just “deal with it later”.


Real Estate Issues:  The most common scenario here is the sale of the marital residence and split of the proceeds.  The divorce decree should specify the allocation of equity, but the actual sale may not occur until months or years later, depending on the terms of the decree.   There may also be additional real property (usually income-producing) which the divorced couple has chosen to keep as co-owners for financial reasons.  Another common situation occurs when the final paperwork transferring real property was not finished, signed or filed at the time of divorce for a variety of reasons (for example, one spouse refuses or forgets to sign, or cannot be found).


 Split of debts:    A divorce decree can allocate a joint debt between the spouses, but it cannot take away a creditor’s right to be paid by co-debtors.  For instance, if a husband and wife owe Credit Card Company $ 10,000.00 and the Judge orders Husband to pay the $10,000.00, Credit Card Company may still legally sue both spouses if the husband does not pay the debt.   In that event, the wife will be able to sue the husband for not paying the debt, but she still is held responsible to Credit Card Company.


Titled Vehicles:    For any vehicle with a title, the title should be changed to reflect the name of the party to whom it was awarded. This is a step that often gets overlooked, especially for property which isn’t used often or doesn’t have a lot of monetary value (trailers or boats that aren’t used often, “spare” pickups or heavy equipment).  This can be remedied with a proper power of attorney for transfer.


Other Accounts:  Bank accounts, stock, and safe deposit boxes fall into this category.  Some of these assets may be accessed and split by showing a certified copy of the divorce decree, available through the district clerk’s office of the county in which you received your divorce.


Fraud in the Divorce:  If a spouse has hidden assets from the other spouse fraudulently during the divorce process, the innocent spouse may have a legal remedy.  In this case, it would be important to contact an attorney to determine if there is anything that should be done.


Some of the above problems can be remedied without the assistance of an attorney and others can become very complicated and may even require court intervention. 


Kalish Law Office has been representing clients in divorce and family law issues since 1984.  We are located in The Woodlands, Texas, just north of Houston.  281-363-3700

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