Once the divorce decree is finalized, my clients usually feel a tremendous sense of relief that a long and often emotional and expensive journey has come to an end. Unfortunately, while a divorce decree marks the end of one journey, it also marks the beginning of another. This is the point at which even most patient clients have thrown their hands up in frustration asking, “When will this divorce be over?!” I believe developing an early understanding of your post-divorce responsibilities is an important step in averting this common frustration. The purpose of this series of articles is to provide you with information about the form and purpose of the different documents you may be asked to review and execute after the divorce is final so that you are prepared for your own post-divorce housekeeping. To begin, let’s discuss some of the most common after divorce to-dos.
Transferring Real Estate
A quit-claim deed is a piece of paper that relates to real estate. The person signing the quit-claim deed (the grantor) releases all of the interest he or she has in the property described in the quit-claim deed to the person named in the deed (the grantee.) If your or your former spouse has decided to keep real estate that you owned while married after the divorce, chances are you will need a quit-claim deed to ensure that clear titled can be transferred if and when the home is sold. More than one quit-claim deed may be necessary if you and your spouse have a vacation home and/or have purchased another home during the pendency of your divorce. The quit-claim deed is then filed with the Recorder of Deeds office in the county where the real estate located. The Recorder of Deeds will record the quit-claim deed and a new title will be issued. The quit-claim will need to be signed prior to refinancing of any real estate to ensure the real estate is financed solely in your name or your former spouse’s name only.
In jurisdictions in which jointly titled vehicles are held as “Jane Doe AND John Doe” as opposed to “Jane Doe AND/OR John Doe,” you will need a gift affidavit. Similar to a quit-claim deed for real estate, the purpose of a gift affidavit is for one party to voluntary transfer any interest he/she has in a vehicle to the person whom was awarded the vehicle in a divorce. The gift affidavit is then filed with the Department of Motor Vehicles and a new title will be issued solely in your name or your former spouse’s name.
Transferring ERISA Qualified Retirement Interests
A domestic relations order is a special order signed by the judge for the limited purpose of dividing retirement accounts as part of a divorce. If the domestic relations order is for a plan qualified by the Employee Retirement Income Security Act of 1974 (ERISA), which covers most private industry plans, it is called a Qualified Domestic Relations Orders or a “QDRO”. If the domestic relations order is for a non-ERISA qualified plan, like a military retirement or a civil service retirement account, it is simply called a Domestic Relations Order or a “DRO.” Your domestic relations order generally must be drafted by your attorney or your former spouse’s attorney and the language then submitted for pre-approval to the organization that administers the plan. Assuming the order is pre-approved; the order must then be approved by the Court and submitted for final approval by the plan administrator. Depending on the efficiency of the plan administrator, this process can easily take several months.
I generally begin my domestic relations order preparation by first contacting the human resources representative of the party whose plan is being divided to obtain the contact information for the plan administrator. I then contact the plan administrator to find out if there is standard language or checklists utilized by the administrators when they are approving domestic relations orders and have that information sent to me. This process alone can be very time consuming and thus, costly. I encourage interested clients to offset these costs by involving them in the investigative portion of this post-divorce task.
If an order is not set into place within a certain time frame after a divorce decree has been entered, the window for a tax free transfer will eventually close.
Tiffany A. McFarland is a Senior Associate with Cordell & Cordell, P.C., in Overland Park, Kansas. Ms. McFarland practices exclusively in the area of domestic relations. Mrs. McFarland is licensed in the state of Missouri and the state of Kansas and is certified as a Guardian ad Litem.