|
Life after
divorce (part three)
Transferring other
Property
If you
need to transfer the ownership of vehicles --
such as a car, motorcycle, or boat -- ask your
attorney how best to do it.
If you're
going to be transferring assets such as stocks,
bonds, or mutual funds to your ex, here's a
piece of good news: you won't have to pay a
capital gains tax if their value has appreciated
(and let's hope it has!) since you originally
purchased them.
QDRO Queries
A
Qualified Domestic Relations Order (QDRO) is a
"required document that awards to a divorcing
spouse all or a portion of the pension benefits
that would otherwise be paid to the plan
participant," says Carter Troyan, the president
of Troyan Corporations, a company that prepares
QDROs in all states except Minnesota. "The QDRO
guarantees that the former spouse will receive
that portion of the pension assigned in the
property settlement agreement or judgment of
divorce." If your divorce judgment states that
you are to receive a portion of your ex's
deferred retirement income -- such as pension
benefits, profit sharing money, or 401(k) funds
-- then you'll need a separate QDRO for each
retirement plan.
This is a
complicated document with serious financial
ramifications, so this isn't the place to try to
save money by doing it yourself. You need to
hire a court-appointed qualified expert to draft
this document. If you have it prepared on the
cheap by someone without the knowledge or
experience to draft it properly, you can
jeopardize the tax-deferred status and the
receipt of the benefits; if a proper QDRO isn't
in place, the administrator may not disperse the
funds according to your divorce agreement.
To ensure
that you'll get your money when the time comes,
send the professionally completed QDRO to the
employer, bank, or firm administering the
retirement benefits.
Insuring your future
Your
divorce decree may allow you to remain on your
ex's health-insurance plan for as much as three
years. The Consolidated Omnibus Budget
Reconciliation Act (COBRA) provides this time
for you to acquire your own health insurance,
but continuing the coverage is not automatic:
you have to inform your ex's employer in writing
within 60 days of your divorce judgment if you
want to maintain coverage.
If your
judgment requires your ex to pay for your COBRA
coverage, ask to receive proof of payment from
the company to ensure that your coverage isn't
canceled for nonpayment. You don't want to
arrive at the emergency room and find you have
no health insurance because you ex "forgot" to
pay the premiums.
If you'll
be receiving spousal or child support, you might
want to consider insuring those payments with a
specialized plan like the one offered by DPC
Inc. Currently available in NJ, MA, PA, OH, and
Washington D.C., the "Alimony and Child Support
Protection Plan" ensures that your support
payments will continue in the event that your
ex-spouse has to stop work because of illness or
disability. (For more information about the
plan, see "Peace of Mind" on page 17).
You may
have other insurance needs too -- from car to
home to life insurance. If all of these were
arranged by your ex, you need to modify them or
purchase new insurance altogether.
CONTINUE |
