In this article, we discuss some common issues that people overlook or put off until later when going through an Illinois Divorce, that can have significant consequences down the line.
When going through a divorce, couples tend to focus on big things, like who gets the house, spousal or child support, parenting time, and visitation rights, and many don’t have much bandwidth left to deal with the little things. But, what may seem like trivial items, such as passwords, cell phone plans, and tax implications can cause serious headaches when issues inevitably crop up in the future. Furthermore, couples in a rush to divorce, or hoping to game the system, face much more serious consequences for actions and decisions that could have easily been avoided.
While some may want to keep their spouse as the primary beneficiary on their life insurance (this is usually the case if there is no other family who will share custody of the child upon the policy holder’s death), many will want to change the beneficiary to another family member. Another option would be to set up a trust that holds the life insurance money, is managed by a trustee, and can only be used to pay for specific things in the child’s life, such as clothes and education-related costs.
Bank accounts, retirement accounts, and any other financial accounts should also be changed to new beneficiaries if you don’t want the assets in these accounts to go directly to your ex-spouse should you die.
Most couples don’t live together after divorce, but many of the monthly bills are under one person. These are easy to forget because they are often auto paid via credit card or bank account. If you’re charged for something that you are not required to pay under the divorce agreement, getting that money back from your ex can be a painstaking process. This is also important because if you’re still listed on a utility account with your ex-spouse and he or she falls behind on payments, you can be held liable for that debt.
Websites and services don’t automatically change because you’re divorced, and there is no law saying that it is illegal for an ex-spouse to access your social media accounts or any other account they have the username and password for. While you may not really care if your ex jumps on your Facebook or Instagram account, if they have access to Amazon Prime, iTunes, or other services, they can easily rack up purchases before you have a chance to change the login credentials.
While changing your emergency contact information may seem trivial at first, think about two scenarios where it could have serious implications: (1) you become medically incapacitated and the hospital is trying to figure out who should make a medical decision if you can’t, and (2) your child needs medical care and the physician must contact someone to make a decision. If the divorce is being handled by a competent attorney, the second item should be agreed upon during the divorce proceedings. Medical care and decision making for children of a divorcing couple are part of the “legal custody” agreement and require court approval before the divorce can be finalized.
When tensions escalate and couples know divorce is imminent, they tend to make rash decisions. One such decision is to move or hide an asset so that it is not included in the divorce proceedings. This doesn’t work and only leads to more problems, such as your spouse filing emergency motions to protect the assets, ultimately increasing the costs of the divorce proceedings. While painful, it’s best to have everything out in the open during a divorce.
This can’t be stressed enough. If you have an estate plan in place and your children are young, there’s a good chance it lists your spouse as a primary beneficiary. In a worst-case scenario, you tell yourself you’re going to modify the estate plan once you get through the tough stuff in the divorce, but you die in a car accident before you get the chance. Good lawyers will ask you about your estate plan when going through the divorce proceedings and can help you modify it appropriately to reflect your post-divorce wishes.
After divorce, you will no longer check the “married” box on your W-4 when filling out tax withholding paperwork. If you’re currently employed you will need to inform your work of the change and fill out a new W-4. Also, if you change your last name after the divorce, you must make sure it is changed under your Social Security information so that you can properly file your taxes under the new last name.
Ideally, you and your ex will follow the provisions set forth in your divorce decrees and neither of you will need to seek legal action against the other. However, humans are inherently flawed, and many violate one or more terms of the contract unknowingly. Whether intentional or not, it’s good to have a plan for how to handle a divorce contract violation. This is something you and the attorney handling your divorce should discuss.
O'Flaherty Law is happy to meet with you by phone or at our office locations in: