Putting Off Changing Financial Paperwork After Divorce? Learn Why You Need To Change Them Right Away
If you're contemplating divorce, you probably have a lot of things on your mind. Divorce is easy enough these days, but during this busy time, you might put off or even forget to change the names of beneficiaries on important financial paperwork. If you put it off long enough and remarry, you could leave your new spouse out in the cold. This guide explains why you need to change your beneficiaries and update other paperwork immediately after separation or divorce.
Your Retirement Fund May Go To Your Ex-Spouse
The chances are good that you have enrolled in some sort of IRA, pension or 401k plan at your work. You may have even set up one of these accounts on your own. Depending on the state you live in, your ex-spouse could get all the money that's in these accounts if you don't change the name of your beneficiaries.
In most cases, a beneficiary on financial documents supersedes a will. The only way around this is if the documents allow you to add an addendum that reads, "as stipulated in my will." Regardless of whether your documents have this addendum, make sure that the names on your will and your retirement paperwork match.
Your Home May Go To Your Ex-Spouse
Ask your attorney to help you with the process of removing your soon-to-be ex from the deed to your property and the mortgage. This will require your ex to sign a quitclaim deed. The sooner you do this, the better. Should something happen to you and your ex's name is still attached to the property, they will automatically get the house. If you're remarried, your new spouse will need to go to court to fight for their right to remain in the home as well.
Your Bank Accounts May Go To Your Ex-Spouse
One quick way to ruin your personal finances during a divorce is to keep joint accounts open. A joint account means that your ex can walk into the bank and take all the money. You have no legal recourse if this were to happen. If you're contemplating divorce, sit down with your ex and decide how the two of you can split the money. Then close the joint accounts and open new ones in your name only.
Ask a divorce lawyer like Garrett & Silvey Law Firm about other ways to protect your finances and any future spouse if you're going through a divorce. Take the time to rewrite your will and make sure that it matches all other financial documents. Share this with others who are going through the heartache of divorce and might not be thinking about the future of these accounts.