I love summer and one of the reasons is I can ask my colleagues for help. Tiffany Howard, who does both divorce AND estate planning has some good reminders for all of you who are in the post divorce stage.
Since its inception, this blog has devoted many posts to the divorce process, which Nancy ably described in a 10-post series taking us from the Complaint through Trial.
It is important to remember, however, that your divorce “to-do” list does not end when the Judgment of Divorce enters; rather, your receipt of the Judgment triggers a slew of further obligations. Of course, there are the child support, parenting, alimony, and property division obligations specifically outlined in your divorce. You should ask your lawyer to help you put together a one or two-page outline for handy reference of those obligations and related timeframes and deadlines, so that you need not refer back to a complicated legal document that is often 20-30 pages in length. With respect to dividing retirement accounts, you should ask your lawyer for a referral to someone who specializes in drafting Qualified Domestic Relations Orders (“QDROs”), which are very technical documents whose precise requirements vary from financial institution to financial institution. You should also consult with your tax advisor and financial planner regarding the practical effects of the divorce on your asset structure, your taxable income, and your allowable deductions.
For a spouse resuming a maiden name, there is the rigmarole of dealing with the RMV, credit bureaus, banks, utilities, and other entities which require notice of a name change.
For both spouses, estate plans and beneficiary designations must be reviewed and updated to ensure that each person’s testamentary wishes are carried out upon death. In Massachusetts, under current law, the Judgment of Divorce automatically revokes any bequest (a gift made by Will or a Trust) to a former spouse. This law does not apply to assets titled in joint names or assets on which a former spouse is named a beneficiary. The Massachusetts Appeals Court recently reminded us that this automatic revocation specifically does not extend to ERISA-governed retirement accounts. In Langevin v. McMorrow (No. 10-P-1591, June 20, 2011), the Court upheld a former spouse’s receipt of her late ex-husband’s pension account, on which she remained the first named beneficiary even twenty years subsequent to her divorce. “After all, an ERISA participant has full control over the distribution of his or her benefits and the source of greatest clarity of a participant’s intent is the beneficiary designation form filed with the plan.”
The Massachusetts Uniform Probate Code, which is set to take effect on January 2, 2012, extends the reach of this revocation-upon-divorce concept to include bequests not only to the former spouse but also to the former spouse’s relatives; it also extends revocation to non-probate transfers and provides that even if federal law (ERISA) preempts this automatic revocation, the spouse receiving a monetary benefit must repay it to the deceased former spouse’s estate. The reach of this law has not yet been tested in Massachusetts. To avoid being the “test case,” be sure to give careful attention to your Will, your Trust, your retirement plans, and your insurance policies after your divorce is final.