Introduction to The Divorce Has Been Finalized – What Now?
Once a divorce has been finalized, either by a decree entered in by the judge or through agreement of the parties that is rarely the final step in the process. There is a lot that needs to be completed by each party post official divorce, especially for couples who were married for an extended period of time or have children.
There is a lot of paperwork to be completed and often times the parties need to still divide up their property. If you utilize an attorney through your divorce, they will remind you of what needs to be completed. If you did not use an attorney, typically the court will do their best to remind you, or the information can be found on the Superior Court Website of what to do next.
More likely than not, spouses are together on various insurance plans. Once a divorce is finalized, that information has to be updated, and done quickly to take advantage of the offers available for divorced individuals.
Health Insurance and COBRA
When a divorce is finalized, if you are covered on your ex-spouse’s health insurance – you are going to lose coverage with that specific plan. There is an option to keep the same plan you have, without actually being on the plan with your now ex-spouse, and that is through COBRA insurance.[i] COBRA stands for the Consolidated Omnibus Budget Reconciliation Act.[ii]
COBRA allows you to keep employee group health insurance for a limited time when coverage would otherwise end due to a life event, like divorce.[iii] You can continue on COBRA insurance for up to three years after your divorce, so it is not a permanent solution.[iv] COBRA is meant to be the bridge post-divorce.
When it comes to enrolling in COBRA insurance, there are very strict deadlines that you must meet in order to receive the insurance.[v] There are other qualifying life events that allow a person to enroll in COBRA insurance other than just divorce. COBRA insurance can have a large price tag.[vi]
You can be charged the entire cost of your health insurance coverage under COBRA.[vii] You may have to pay the entire premium, including the portion that was paid by the employer.[viii] You can also be charged a two percent administration fee. In other words, you may be charged 102 percent of the group rate.[ix]
If either spouse has life insurance, after a divorce they may want to update who their beneficiary is. Often times after a divorce, ex-spouses do not want to work together let alone provide benefits for each other. Though, it is not uncommon for divorced spouses to keep each other as beneficiaries for life insurance policies and the like for the benefit of mutual children. It really depends on the relationship the parties have.
For individuals who do not want to change the beneficiary, and keep the now ex-spouse on the policy, there will still be paperwork involved.[x] This is because in many states, the original designation is automatically revoked by the divorce.[xi] If the individual does want to keep the ex-spouse as the beneficiary, they can just elect to do so when they fill out the new paperwork.[xii]
Other than updating life insurance, health insurance, and other policies that list your ex-spouse as a beneficiary, there are other aspects of estate planning that need to be updated post-divorce. One of the first things that should be done is revoking your will.[xiii] And if you do not already have a will, now is a good time to draft one.
Considering the emotional turmoil you may be experiencing now that you are living a divorced life, hiring an attorney to draft your will is usually a good idea – but it is not always necessary. There are great products online to help guide you to creating your will, but reviewing this information with an attorney always proves beneficial.
If you had a will during your marriage, you likely listed your spouse as the beneficiary to receive everything if you were to predecease them.[xiv] You will likely now want to change this beneficiary and also name a new executor to handle your estate after you pass away. Just like with life insurance, it is possible and not unheard of that divorced spouses want to keep their will the same – even if the ex-spouse is going to receive everything. It really depends on the relationship you have and the situation you are in.
Another important set of documents to update post-divorce are powers of attorney.[xv] If you have your ex-spouse listed as your financial power of attorney (which makes financial decisions) or your health care power of attorney (which makes medical decisions)– many people will want to update that so their ex-spouse cannot make those important life decisions for them, if they were to become incapacitated. Divorce will NOT automatically revoke these documents, so if you want to remove your spouse from these documents, it is necessary to redraft these documents right away after divorce.
Another important thing to remember in post-divorce times is that there may still be property that needs to be divided, as well as financial accounts. If the parties did not live separately for long before the divorce, it is likely that the marital residence will still have a lot of property that the parties have agreed to equally split up.
Unfortunately, the court does not provide a service where someone goes and collects each parties items and delivers it to them – even though for many people, that would decrease the tension and help the process. Realistically, the parties have to come to an agreement on a date and time, and how to move the items to each parties new residence. It can be a stressful experience, so the sooner it gets done – the better
Conclusion to The Divorce Has Been Finalized – What Now?
The divorce process can be an incredibly stressful and long proceeding, but despite this – it does not end there. There is a LOT to do post-divorce and it is important that each party remembers to update financial accounts, estate planning documents, and takes care of property division as soon as possible. The sooner these tasks are taken care of, the sooner each individual can move on with their new life.
[i] See Getting COBRA and Health Coverage After Divorce Lawyers.com (Accessed April 26, 2017) http://family-law.lawyers.com/divorce/getting-cobra-and-health-coverage-after-divorce.html
[v] See After the Divorce: Update Insurance Policies and Beneficiaries NOLO Legal Encyclopedia Divorce Net (Accessed April 27, 2017) http://www.divorcenet.com/resources/divorce/before-and-after-divorce/after-divorce-update-insurance-
[vi] See Getting COBRA and Health Coverage After Divorce Lawyers.com (Accessed April 26, 2017) http://family-law.lawyers.com/divorce/getting-cobra-and-health-coverage-after-divorce.html
[x] See After the Divorce: Update Insurance Policies and Beneficiaries NOLO Legal Encyclopedia Divorce Net (Accessed April 27, 2017) http://www.divorcenet.com/resources/divorce/before-and-after-divorce/after-divorce-update-insurance-
[xiii] See Revising Your Estate Plan After Divorce NOLO Legal Encyclopedia (Accessed April 27, 2017) http://www.nolo.com/legal-encyclopedia/revising-your-estate-plan-after-divorce.html