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Birmingham, Mich. – March 15, 2016 – The months of January through April, often referred to as tax season, bring heightened attention to personal finances. When a couple is going through the divorce process, finances and related aspects of their life should be given extra attention. According to Jessica Woll, managing partner of Woll & Woll, P.C., a Michigan-based divorce and family law practice with more than 20 years of experience in complex family law issues, there are three key areas of personal finance that divorcing couples should review during the divorce process:
1. Maintain the Status Quo
Woll says the court wants a couple to maintain the status quo as much as possible during a divorce proceeding, pending the finalization of the case.
“Judges generally want couples to continue to pay household expenses and share time with children as if they had not filed for divorce, especially if the family remains under the same roof,” Woll said. “After all, the couple is still husband and wife until entry of the divorce judgment.”
“Many divorce attorneys will enter orders that prohibit either party from making beneficiary changes to insurance policies and retirement accounts until a settlement is reached, either by consent or trial,” said Woll, noting this practice helps ensure that no assets are dissipated before the finalization of the case.
2. Power of Attorney
“Prior to a case closing, divorcing couples absolutely do not have to provide their soon-to-be ex-spouse with power of attorney for financial or medical reasons,” Woll said. “Documents that would allow one’s spouse to make financial or medical decisions can be revoked during the case.
“Depending on the relationship between the divorcing couple, if one spouse is no longer comfortable allowing the other spouse to stand in their place as a proxy, the revocation of such powers should be considered and dealt with during the divorce process.”
3. Estate planning, Insurance and Division of Assets
According to Woll, a couple’s judgment of divorce should cover issues pertaining to estate planning, health insurance, life insurance and the division of retirement accounts.
“If one spouse is ordered to maintain life insurance on their life to secure child and spousal support or the pay out of other assets, the judgment of divorce should clearly spell out these obligations, as well as the fact that the designation should be reaffirmed after entry of the divorce judgment, if necessary,” Woll said.
Woll adds that whether a couple created an estate plan during their marriage or not, creating one after entry of a divorce judgment is strongly encouraged.
“If a couple has children or one spouse remarries, the need for a new estate plan after divorce is critical to avoid confusion, probate battles and will contests that could arise in the future,” Woll said. “A newly created estate plan provides the now divorced couple with peace of mind and ensures that important personal finances affairs are in order after the dissolution of the marriage.”
Jessica Woll is the author of the DivorceWisdom blog. Follow Woll & Woll on Twitter @DivorceWisdom.
About Woll & Woll, P.C.
Established in 1994, Woll & Woll, P.C. specializes in divorce and family law, including legal separation, post-judgment of divorce matters, removal of domicile actions, stepparent adoption, custody, child support, paternity and other family issues. Learn more at http://www.wollandwollpc.com.