Getting divorced is a complicated and drawn-out process, where emotions run high and the last thing on an individual’s mind is updating his/her estate planning documents. While that is indeed the case for many individuals going through a divorce, once a divorce is finalized, it is imperative that individuals review their estate planning documents and amend or update them so that they will reflect the individual’s new planning goals. This review does not stop at a Will or Trust; rather, it will be necessary for individuals to review all of their financial accounts - their bank account information, life insurance, investment accounts, and retirement accounts - as the likely primary designated beneficiary of such accounts is the one person that they definitely do not want to receive a benefit from them - the individual’s ex-spouse!
When it comes to retirement accounts, pursuant to the divorce decree, many couples agree to divide their retirement accounts (e.g., 401(k)s or pension plans) between them. In that respect, a Qualified Domestic Relations Order (QDRO) must be submitted to the Court in order to effectuate any division designated in the divorce decree. Failure to properly prepare and submit the QDRO can be detrimental to an individual.
The above-referenced items, while certainly not all-inclusive, are some important items to think about after a couple has completed a divorce, and as such, they should be handled timely and expeditiously by each individual.
If you have gone through a divorce and require any assistance with regard to your post-divorce estate planning, the attorneys at Underberg & Kessler are available to assist you.