Typically, couples start the divorce mediation process without thinking about the administrative side of things. After the divorce mediation process starts, we get questions like “when do we separate our bank accounts” or “can I still use my credit card”. Based on our experience, here is a checklist of things you should think about:
1. Checking and Savings Accounts:
First, if you have always lived out of joint checking and savings accounts, consider how you want to continue on until your divorce is final. You have a couple of options. You can separate those accounts now and use a temporary support order to ensure that both you and your spouse are financially sustained until the divorce is final. You can also maintain the status quo until your divorce agreement has been filed with the court. Either way, this is a conversation you should have either prior to or during your mediation to avoid any unnecessary confusion. If you are dividing savings accounts, may sure that you and your spouse both agree on how those savings should be divided before hand. If you don’t, you may want to save that topic to be discussed in your mediation.
It is very common for one spouse to be covered under the other spouse’s health insurance. Many couples come in and ask how long this will be able to continue, as health insurance can be expensive and difficult to obtain. The usual answer is that the spouse can stay on the other spouse’s health insurance until the divorce is final. After that, the spouse will be removed from the other’s insurance and will have to obtain his or her own coverage. This is important to know because sometimes enrollment deadlines for individuals will pass by. Further, the cost of health insurance today is very high and may need to be considered as part of the overall agreement.
Life insurance is another issue that should be considered. While your divorce is pending, you should leave all insurance in tact. However, after your divorce papers have been filed, you may want to take a look at your beneficiaries to make sure that what you have chosen reflects what you currently intend.
3. Estate Planning Matters:
Many of our clients come to mediation with an estate plan that was drafted for their family during their marriage. While it may make sense to leave this in tact until the divorce has been finalized, it may also make sense for the clients to obtain an interim estate plan. This is an estate plan that would cover anything that may happen before the divorce is final. If you do not get an interim estate plan, you will certainly want to sit down with an estate planning attorney to discuss drafting new trusts and wills. Remember, your estate plans will not be valid after your divorce is final.
4. Credit Cards:
When your divorce mediation is still going on, and after your divorce papers have been served, remember not to make any major expenditures on your credit card without your spouse’s consent. We appreciate that this can be a time of transition, and may require you to purchase new furniture and necessities. Just make sure you discuss these expenses with your spouse prior to incurring them. This helps to avoid confusion over who will be responsible for paying these charges.
In mediation, we can discuss how you and your spouse agree to divide certain retirement accounts, including pensions. In some situations, however, this may not be enough to get those accounts physically divided. Sometimes, a special court order called a Qualified Domestic Relations Order (“QDRO”) is needed to get the retirement/pension company to split those accounts. This is why we inform our clients that they must contact their respective retirement companies to find this out right away. If a QDRO is needed, we will provide you with a referral to a competent attorney who can help you.
At Alternative Divorce Solutions, we do our best to make sure our clients are prepared to handle the issues that occur before, during and after their divorce. We believe that during this difficult time, information is power.