Two Questions You Should Be Asking Your Divorce Lawyer
There are two common mistakes your lawyer might make when finalizing your divorce – first, failing to preserve your right to have a judge decide how your property will be distributed and whether alimony will be paid, and second, mishandling the division of your retirement benefits. These two mistakes can have significant legal consequences and can be made even by experienced, careful attorneys.
In North Carolina, you have the right to have a judge decide how your property will be divided between you and your spouse. You also have the right to have a judge decide if either spouse is entitled to alimony, and if so, how much and for how long. You only have these rights as a married person, which means if you have not already settled the issues of equitable distribution (who gets what) and alimony, you must formally ask the court to decide those issues (by filing a claim) before a final divorce judgment is entered. If your divorce judgment is entered and you do not have a claim for equitable distribution or alimony pending, then your rights to those claims either one are lost forever. It is not enough for your spouse to have filed a claim or counterclaim for equitable distribution or alimony. He or she could decide, for example, to voluntarily dismiss the claim after the divorce judgment is entered, and if you had never asserted them in your own claim or counterclaim, your rights would still be forever barred. Even if you have a signed separation agreement and property settlement, it can be important to specifically preserve your rights to equitable distribution and/or alimony. You should ask your lawyer about these claims as they relate to your specific case and circumstances.
Another area where mistakes can be easily made is the division and distribution of
retirement benefits. Your divorce lawyer should investigate all possible retirement benefits and should properly preserve and protect your interests in them. Some plans are “qualified” and are governed by ERISA, the Employee Retirement Security Act of 1974. These plans require the proper filing and execution of a QDRO (Qualified Domestic Relations Order) to protect one spouse’s ownership interest in the other’s retirement plan. There are many specific legal requirements for a QDRO to be valid and effective. Even “non-qualified” retirement plans such as an IRA do not require a QDRO, but they still require proper legal documentation. For example, the IRS requires a transfer of IRA funds to occur pursuant to a divorce or separation instrument that is “a decree of divorce or separate maintenance or a written instrument incident to such a decree” in order to avoid (significant) early withdrawal penalties. A separation agreement or property settlement without more is not enough. It is important to identify and then properly divide retirement assets upon divorce, and you should ask your lawyer about the requirements as they pertain to your particular situation.
There are many areas where people can make mistakes during the divorce process that can significantly affect their rights or obligations. It is important to speak with an experienced family lawyer to discuss your particular case. As always, if you have any questions or desire any additional information, please feel free to explore this site further or contact my office to learn more.