Wrapping Up Loose Ends After a Divorce
What comes next? Whether by trial or alternative dispute resolution, there comes a point when the final papers have been filed and the Judge has signed the Final Order of Divorce. Before breathing a sigh of relief that it’s over, the signing of the Final Order of Divorce may legally end the marriage, but it is not the last step. There are further steps that parties must take in order to wrap up the variety of loose ends.
Dividing Up Property
Married couples may hold a variety of property. Whether the Final Order of Divorce is entered following a trial, or as a result of the parties’ entering a Property Settlement Agreement if resolved using alternative dispute resolution, these documents spell out who gets what. However, the parties still have to take steps to comply with the provisions for splitting the property up.
Retirement Accounts like a 401(k) require a court order for a transfer. A QDRO (Qualified Domestic Relations Order) will set out the specific amount or what specific percentage as of a certain date needs to be transferred into a new or current account for one of the parties. The QDRO is to prevent the early withdrawal penalties and income tax consequences that would normally occur when money is transferred out of a retirement account. The plan administrator of the retirement account needs to be provided the QDRO to divide or transfer the funds.
IRA Accounts are slightly different retirement accounts, and most institutions will already have a form for transferring funds from one account to another. This form generally requires the signature of both parties and is easier to divide compared to other retirement assets since a court order is not needed.
Real Property is the term used to refer to real estate. There can be various outcomes including one party keeping the property either with or without buying out the other party’s interest, or the property being sold, and the sale proceeds being divided. If the house has a mortgage on it, there may need to be a refinancing or payoff that requires working with the financial institution that holds mortgage. If the house is to be sold, both parties will need to cooperate with the real estate agent and other parties involved in the sale like inspectors and title companies to make sure the sale goes through. Specifics regarding the manner and timing for the disposition of the property may be included in the Agreement and/or Court Order.
Personal Property division generally is resolved in the property settlement agreement, and the main issue concerns scheduling a time for the spouses to take possession of property held by the other. Some items of personal property like cars have a title, which both parties will have to sign to make an effective transfer.
Investment Assets and Bank Accounts in the parties’ joint names often will be closed, so both parties will have to open new accounts with the financial institution or elsewhere into which their share of the assets will be transferred from the joint account.
Filing Tax Returns
Documents may have to be signed by the parties in order for the parties to comply with the provisions of their Agreement or Court Order regarding the filing of tax returns.
The parties may have to close joint accounts and/or credit cards.
The Agreement or Court Order may dictate that additional Orders be entered for the payment of support. Other administrative tasks may be required, such as exchanging health insurance information for the children so that each parent has the proper documentation to take the child to a doctor.
Do you want to know more the next steps after the entry of a Final Order of Divorce and what to expect? Contact us to set up a consultation.
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