What Needs to Happen After a Divorce

 Posted on October 20, 2015 in Divorce

After a divorce is finalized you can feel worn out. Even when a divorce was amicable, the emotions involved can take a toll. But, after you receive the final paperwork from the court, you still have a few things to set in order. Failure to make a few changes to your estate planning documents, taxes, and retirement accounts now could have disastrous consequences later.

Estate Planning

Often, spouses list each other as the beneficiary on a variety of documents without even thinking about it. After you are divorced, you need to go and make sure all those beneficiary designations are changed from your now ex-spouse to someone else.

After a divorce is also a good time to draft a new will or amend an old one. With the breakup of your marriage, you may now feel differently about where your property should go when you die. Failure to draft a new will or trust may mean the documents fail at your death because the divorce made them impossible to execute. It could also mean your ex-spouse inherits some of your property.

Life insurance policies also often need to be revisited. While the law has some safeguards for wills in cases of a divorce, if you leave your ex-spouse as your life insurance beneficiary it does not matter if you are divorced, the life insurance will be paid out to whoever is listed.

Taxes and Retirement

While a divorce is pending, you cannot make any changes to any financial accounts without the permission of the court. But, once the divorce is over, you may need to make some changes to the survivor conditions on your retirement accounts. If your case involved a qualified domestic relations order (QDRO), you should also get some advice from your lawyer as to what you should do.

Divorces rarely work out neatly around tax deadlines. You may need an accountant to help you sort out your taxes. After your divorce is final you can no longer file as married for tax purposes. During the divorce, you should also have worked out who is going to claim the children as dependents for purposes of tax credits and deductions.

Most property transfers that happen during a divorce will not have any impact on your taxes. However, if there was a business or any assets that were in a holding company, someone may have some tax liability to worry about. Your lawyer and financial advisor can help you sort out the right forms to file.

If you have any questions about what to do after a divorce, or any other family issues, you need to consult with a skilled and experienced Lombard divorce lawyer. Call A. Traub & Associates today to schedule a consultation in one of our two convenient office locations. 

Source:

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2086&ChapterID=59