Your ex-spouse may still be a beneficiary of your estate. Have you changed all of your beneficiary designations

Your ex-spouse may still be a beneficiary of your estate. Have you changed all of your beneficiary designations? – Whether it is for your retirement benefits or your life insurance, if you don’t remember to change your beneficiary forms when you get divorced your spouse will remain the beneficiary.


It goes without saying that it is important for your divorce lawyer to carefully craft a settlement agreement to submit to the court in your divorce case so that the agreement accurately reflects the intentions of you and your spouse. However, when it comes to your life insurance policies and employee benefits such as retirement plans, stock plans, and life insurance proceeds, while your lawyer may be able to include certain protective language in your agreement, it is up to you to ensure that your benefits are distributed properly. You can do this by contacting your benefit provider and filling out the requisite forms to change your designated beneficiary so that your ex-spouse is no longer listed as the person to receive the benefits in the event of your death. While the divorce is pending you are typically prohibited from doing this.

I have seen several cases where a party to a divorce passes away after the divorce without having remembered to change their designated benefit beneficiary forms. Unfortunately, due to a complicated set of Federal laws known as ERISA, in all likelihood the benefit company is going to distribute the deceased spouse’s benefit proceeds to the ex-spouse REGARDLESS OF WHAT THE DIVORCE SETTLEMENT AGREEMENT SAYS. Under Federal law, the benefit company is essentially only required to pay out any accrued benefits to whoever is named on the company’s forms, even if that person may have waived his or her right to the benefits in a divorce proceeding. After the benefits are distributed, the estate of the deceased spouse then has to sue the ex-spouse to claim the benefit proceeds under the divorce agreement.

If the attorney carefully worded the divorce agreement then Georgia law is clear that the ex-spouse must give the money back to the estate. However, because of the ERISA loophole there is the potential the ex-spouse will have the opportunity to spend all the money before the estate takes legal action, if the deceased spouse never got around to changing his or her beneficiary forms. Further, if the divorce agreement was not drafted properly – that is the agreement did not include an “explicit waiver of [a] party’s interest” – then there is always the chance the courts will rule in favor of the ex-spouse.

This entire headache can be avoided if you remember to change your beneficiary forms so that your benefit company knows exactly who you want your benefits paid to in the event of your death. As previously mentioned, this is one aspect of the divorce process that your attorney cannot handle for you. If you do not know who to put as your beneficiary, contact a trust and estate planning attorney who can advise you or some alternate options.

Getting released from liability for the mortgage

Thirty years is the initial term of most mortgages, so in a divorce situation it is generally of utmost importance for both parties to reach an agreement that specifically establishes a workable method to dispose of the marital mortgage. The idea is to not only to legally separate yourself from your spouse, but also from all marital debt so that you can start your new life without worrying about previous obligations.


Unfortunately, getting released from liability for the mortgage is a problem, especially in today’s market. And when a divorce is added to the equation, it becomes even more complicated because (1) the courts become involved and must approve the basic terms for any future sale or refinance of the marital home; and (2) bankruptcy laws surrounding divorce obligations have gotten stricter over the past few years.

Unless the parties agree to sell the marital residence together at the time of the divorce or separation, one party or the other will be awarded possession and legal title to the house subject to the mortgage in both parties’ names. The party no longer having possession or title to the marital residence is still liable for the mortgage until the mortgage is paid off by virtue of a refinancing or sale. That means both parties’ credit will continue to reflect this debt and be affected by the possibility of late payments even though only one party will have the right to reside in the house. For this reason, it is important for both parties in a divorce to carefully consider their options as to potentially satisfying the marital mortgage by agreement before jumping straight into court.

Typically it is not unreasonable for both parties to agree that the person with possession of the marital residence “shall refinance the mortgage on the marital residence releasing the other party from liability”. However, simply including a provision to refinance the marital residence is not enough. Here’s why:

The Courts are limited in their power to enforce such a provision. The remedy for the trial court is simply. Either:

1. A hefty fine each day until the mortgage is refinanced. (I have seen as much as $1500 per day suggested by the Court)

2. Incarceration in the local jail until the refinancing is completed.

Neither party wants either of these results. Be sure your attorney drafts a settlement agreement to provide for the possibility that the mortgage may not be refinanced. Detail will be critical at this point. The detail should cover the following:

1.Exclusive ownership. Transferring the asset back to the other party so that they can participate in the sale or rental of the property, if that becomes necessary. This means allowing occupancy or possession to both parties.

2.Costs of Sale or Rental. Costs to cover maintaining the house while it is in limbo and the expenses associated with a sale will help move the process quickly past the obstacles anyone faces when selling a home. Such detail would possibly include:
a. List the house for sale with a real estate broker selected;

b. A method for calculating the price;

c. Cooperation during a sale including to pursue the sale in a good faith and expeditious manner;

d. Acceptable terms of sale. For instance, a cash offer of 95% of the list price must be accepted.

* Special thanks to Atlanta Family Law Attorney Jordan Hendrick for his contribution on this article.

Relocation Options for the Future

You've probably thought about this a few times recently, but it used to be so much easier to find and keep a job! You would get hired by a terrific company, work hard and advance in the organization as you proved your worth. You could establish roots in the company, as well as in the community. That has all changed, and I'm now receiving many more questions about the importance of factoring the possibility of a future relocation into the divorce settlement agreement.

Economic experts have stated that as the US pulls out of this recession, there will be a need for only 90% of the previous workforce. This makes it more likely that you may need to relocate at some point to either keep or find a job. It is now much more important to contemplate the possibility of relocation during a divorce proceeding that includes child custody and visitation decisions.

If you are currently working on your settlement agreement, take the extra time (and money) to also include specifics of a long distance visitation schedule, along with a future relocation provision. As an example, visitation should be modified so that an out-of-state relocation does not put you (or your ex) in contempt. Or if child support is an issue, think about splitting travel expenses 50/50.

There are some enforcement challenges to consider, but here are five good reasons to include relocation and long distance visitation language in your agreement:

1.When you move, you will be able to do so without the threat of contempt charges.

2.In the event you need to move, your ex will have a tough time trying to contest that he/she isn't sure anymore.

3.You may be getting along just fine today, but what about if one of you gets remarried? If the language is already in place, then you won't have to worry about a 3rd party's influence.

4.Your ex may not contest the custody, but may later decide to contest visitation. If you're contemplating relocation, you may be caught in limbo until your agreement is renegotiated.

5.It may avoid the necessity of having to hire an attorney when you do move away. If you just agree to agree on future details, you may get stuck having to hire attorneys again. So include the details!

Now here's the bad news. Even if your ex signs an agreement that allows for future relocation, it may still be contested just like any other aspect of your settlement agreement. However, the Court will look at what you have already agreed to and take that into account. Plus, you can proceed without having to worry about a contempt charge.

http://www.stearns-law.com/ for more information or contact us at 770-426-1148 to speak with a caring Family Law Attorney in Atlanta, Georgia.

Rules of Un-Engagement

If you have watched any television over the holiday season, you have undoubtedly been subjected to the seemingly never-ending barrage of jewelry commercials portraying husbands and boyfriends surprising their wives and girlfriends with fine rings, bracelets, necklaces, etc. Of course, the jewelry companies are hoping to convince their male audience that the answer to happily ever after lies in their ability to give their significant other a perfect (and hopefully expensive) piece of jewelry. What the jewelry companies don't worry about is this¦who gets to keep the jewelry if things do not work out as expected? In 2009, I was involved in several cases where I had to answer that question.


The three most common scenarios that could lead to a dispute over who gets to keep expensive jewelry that was given as a gift during the course of a marital or premarital relationship are as follows:

(1) A man gives a woman an engagement ring which she accepts but the marriage is called off before the wedding;

(2) One spouse receives jewelry from the other spouse or the other spouse's family as part of the wedding ceremony but the marriage ends in divorce; or

(3) One spouse receives jewelry from the other spouse as a Birthday or Christmas present but the marriage ends in divorce.

Normally, a gift given to one spouse by the other becomes the receiving spouse's separate property, meaning it is not subject to reconveyance or equitable division in the event of a future divorce. Thus, in scenarios (2) and (3) above, the jewelry would generally remain in the hands of the spouse that received it as a gift. The caveat is that under Georgia law, the person claiming the gift has the burden to prove that the donor intended the jewelry as an unconditional gift, that the gift was accepted, and that the gift was actually delivered or received. Any factual dispute as to whether there was or was not a gift under the law must be decided by a judge or jury.

However, engagement rings are different because the law assumes that an engagement ring is only given in contemplation of marriage and is therefore subject to the implied condition that it is to be returned if the engagement is broken. It should be noted though, if the woman attempts to give the ring back to the man and he refuses, the law will view this refusal as the man's intent to allow the woman to keep the ring unconditionally. Therefore, if the man later changes his mind and asks for the ring back he will have no recourse. This point was interestingly made by Justice Musmanno of the Supreme Court of Pennsylvania in a 1957 case:

A gift given by a man to a woman on condition that she embark on the sea of matrimony with him is no different from a gift based on the condition that the donee sail on any other sea. If, after receiving the provisional gift, the donee refuses to leave the harbor, - if the anchor of contractual performance sticks in the sands of irresolution and procrastination the gift must be restored to the donor. A fortiori would this be true when the donee not only refused to sail with the donor, but, on the contrary, walks up the gangplank of another ship arm in arm with the donor's rival.

So it appears that in normal circumstances, a disappointed fiance is entitled to recoup his jewelry expenses while a disappointed husband is not.


http://www.stearns-law.com/ for more information or contact us at 770-426-1148 to speak with a caring Family Law Attorney in Atlanta, Georgia.