Thursday, March 10, 2011

The Separation after the Divorce - W.I.N. Your Future.

You spend all day in Court, maybe you’ve had days of trial, maybe things were amicable.  Regardless, you are not finished yet.  Even after the Judge signs your divorce decree and you have received your certified copy, there are still things left for you to do.  Certain designations do not change by virtue of the ink drying on your divorce papers.

If your former spouse was designated as a beneficiary of a life insurance policy that you are maintaining, that designation will remain until you take affirmative steps to change the beneficiary designation.  The same holds true for retirement plans.  You must take affirmative steps to change the beneficiary designation.

You will also want to update your Last Will and Testament, your Living Will, and your Health Care Power of Attorney.  Although your former spouse is no longer entitled to the statutory benefits under probate law, if you made a specific bequest to your former spouse in your Will, that bequest remains until you change it.  You will also likely wish to designate a new executor under your Will as your former spouse is probably your current designee.  The same holds true for your Living Will and Health Care Power of Attorney.

That said, if your Divorce Decree requires that you are to maintain a life insurance policy with your ex-spouse as beneficiary, or it requires that you designate your ex-spouse as a beneficiary of a retirement plan, you must abide by the Decree or face possible contempt charges.

And, do not overlook the years you and your spouse shared credit.  Immediately begin to establish new credit in your sole name and remove your ex-spouse as an authorized user on any card or line of credit.  Remember these credit relationships are contractual between your bank or lender and you and your ex-spouse.  These contractual relationships are not typically controlled by your divorce decree.

Once you are officially divorced, you will still need to look at these various issues to be truly separate.  When you have your signed divorce decree in hand, remember to now W.I.N. your new future:

     *  Wills, powers of attorney, and estate documents;
     *  Insurance related documents; and
     *  New credit and remove your ex-spouse as an authorized user.

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