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Big picture financial questions to ask during a Texas divorce

Today’s blog post from the attorneys with the Law Office of Bryan Fagan, PLLC, will focus on some more significant picture issues relevant to your divorce. You may not be focused on these particular issues, which is understandable. You probably have the feeling that you are merely trying to keep your head above water during this time. Focusing on anything else would be too much effort for a minimal reward.

I would argue that while the rewards you receive for considering these issues may not be immediate, they are essential to you and your children. With that said, let’s take a look at a few of these issues that I believe at least need to cross your radar during your divorce.

What to do about your child’s college education

Saving for college is one of the most important things that a parent can do for their child. It may not be fun, glamorous, or exciting, but it is necessary. College costs have skyrocketed in recent years, and there is no sign of any decline in those costs. Couple that with a legitimate crisis in the world of student loans, and you have a recipe for disaster awaiting your child if you do not plan for their post-high school education.

If you have not set up a specified college fund for your child, fear not. You can withdraw money from an Individual Retirement Account (IRA) without penalty if the money goes directly to pay for your child’s college tuition. If you are over the age of 59 ½, there is no penalty for withdrawing funds for any use, I should add.

There are many options for you to save money for your child’s or your grandchild’s education. An IRA is one option that allows you a great deal of autonomy in controlling where the money is invested and then withdrawing it tax-free if you have invested your money into a Roth IRA.

This is relevant to your divorce because IRAs are often divided into divorces, as we’ve discussed for the better part of a week. If you have a divorce on the horizon and are concerned about this occurring to your family, consider whether you can make an offer to your spouse of an equally valuable asset to trade in for the IRA. The odds are decent that your spouse will agree with you that the IRA that was funded to finance a child’s education should remain, anyways.

Updating or changing beneficiaries in your retirement plans or insurance policies

This is a critical step for you to take during your divorce. The last thing you want is to go through a difficult divorce, only to pass away soon after that and have all of your belongings or life insurance proceeds go to your ex-spouse. To avoid this unfortunate outcome, it is recommended that you go through your paperwork and update beneficiaries as soon as the judge approves your divorce decree. You are likely barred from doing so during the divorce.

Moving forward after your divorce concludes

Imagine that you are completely done with your divorce, and you are now considering your next moves as a single adult. It’s been a long road to get to this point, but there are always additional steps that you can take to ensure that your divorce concludes without a hitch and you propel into the next phase of your life with nothing hindering you from your divorce.

First of all, your divorce decree is not the only document that will be filed with the court upon the conclusion of your divorce case. A basic form identifies you and your spouse and will be filed with the Bureau of Vital Statistics in Austin. There are child support-related documents and wage withholding orders if your pay is withheld to pay monthly child support. These final documents must be filled out correctly and submitted with your decree to the court. Work with your attorney to ensure closing documents are complete and correct.

We spoke yesterday about Qualified Domestic Relations Orders (QDRO) and their importance when dividing many retirement plans. Your attorney should plan and work to get approval from your spouse’s retirement plan administrator so that the QDRO language is approved once the judge signs it. If the plan does not accept the QDRO, you will run into a situation where you will have to go back to court for the judge’s signature on the document once a judge has signed off on it. The last thing you want is a hiccup on receiving the funds from your spouse’s plan after you have already paid your attorney and your case has been closed.

When your judgment is entered, is your case actually done and over with?

As I just noted, no, your case is not necessarily done even when the judge says that you and your spouse are officially divorced. For one thing, you need to follow up with your attorney’s office to make sure progress is being made on splitting up the retirement accounts as planned. You and your attorney will submit a QDRO to the plan administrator when the judge has signed off on your divorce decree.

I realize that much of what I just mentioned doesn’t appear to be advice for you as it is advice for the attorney representing you in your divorce. However, remember that you are ultimately the person in charge of your case. You have trust in your attorney, and they must put your interests before their own, but your attorney is not the person who will ultimately benefit or be burdened by the outcome of your divorce. Since you are the person for whom the divorce is being done, it behooves you to follow through on your case and see that it is prosecuted well.

Our office has specific closing procedures that must be done and verified before we will move your case from an “active” point to a “closed” case. However, it does happen that some attorneys do not have systems like this in place. As a result, your case could be left open if the other attorney allows it to be. Could you imagine what it must be like to think that you are divorced only to find months later that there is still work to be done?

The bottom line is that the judge must sign your final decree of divorce and then have the clerk of their court enter the signed judgment into the official record of your case. At this point, you are officially divorced. Until then, close enough does not count. Even after a final trial or mediation, please work with your attorney to ensure that their office has everything needed to finalize and put the divorce behind you.

Moving on from divorce in a responsible manner- tomorrow’s blog post topic

As we wind down our series of blog posts on issues surrounding divorce, we will look at your life post-divorce. What should you do to ensure your case closes out successfully? How should you approach various problems now that you are a single adult? We will touch on these subjects and more tomorrow right here on our blog.

In the meantime, if you have any questions for the attorneys with our office, please do not hesitate to contact the Law Office of Bryan Fagan, PLLC. We offer free of charge consultations with one of our licensed family law attorneys six days a week. We take great pride in representing people from all parts of our community and look forward to having an opportunity to discuss the possibility of working on your behalf as well.

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