Can a QDRO Be Reversed?

A big concern for divorcing couples dividing retirement assets is how to do so without incurring an income tax penalty as well as taxes for transfer of a retirement plan. To do this, couples will want to use a Qualified Domestic Relations Order or a “QDRO.” A QDRO is a court order signed by a Colorado District Court Judge. Without a QDRO, a transfer of retirement assets is taxable to the transferor; additionally, if the transferor is 59 ½ or younger, there is a 10 percent early withdrawal penalty added.

If you have submitted a QDRO to your retirement plan and decide you have changed your mind, it is impossible to reverse once it has been received and processed. The only way to have it changed is to have the courts issue an amendment to the original QDRO, although it would still be up to the administrator of the retirement plan to review the new plans and approve them.

Whether the QDRO can be amended or not generally depends on whether your divorce agreements are accurately reflected within the terms of the original QDRO. If a QDRO clearly goes against your divorce agreement, then that provides simple reasoning for why the QDRO needs modification. Otherwise, you will need to renegotiate with your ex-spouse in order to get the QDRO amended.

In many divorce cases, important issues related to QDROs are left unresolved during the divorce proceedings, or given less attention than they deserve. This makes the QDRO even more important in terms of protecting your rights to your property. This is why it is always important to have an attorney look carefully over your QDRO to ensure that your rights are being protected.

Exception: If your retirement funds are in simplified employee pensions (SEP) IRA assets or individual retirement accounts, a QDRO is not necessary.

The divorce attorneys at Divorce Matters are well-versed in matters of equitable division of marital property.

The Benefits of Filing Bankruptcy before Divorce

The financial hit of divorce sometimes drives a couple to consider bankruptcy, and it can be complicated depending on the individual circumstances of your divorce to determine whether you should file bankruptcy before or after your divorce. While there are benefits to both, generally speaking, filing before your divorce can put you on more stable ground once your divorce is in motion.

If you and your spouse are on good enough terms to work through a joint bankruptcy, you will be able to have most of your joint debts addressed under that bankruptcy. This includes debts like car loans that cost too much, mortgages on homes that are underwater, medical bills and even your unsecured credit card debts. If you wait until after divorce to file for bankruptcy, and only one spouse files, the non-filing spouse will still be on the hook for debts.

What Type of Bankruptcy Do I File For?

Filing for Chapter 7 takes a much shorter time to complete than filing for Chapter 13. In Chapter 7, your debts will usually be discharged after a few months, whereas Chapter 13 can take three to five years. Depending on which you plan to file for, it can affect your decision to file before or after divorce.

Of course, every divorce is different and there is no one-size-fits-all solution to filing for bankruptcy when you are planning a divorce. However, the benefits can be great and can allow you to move forward with your divorce with less debt to divide, which simplifies the property division process in divorce.

Our Denver divorce attorneys help clients throughout Colorado with matters such as property division, including debts.

When Are the Worst Times Financially to Get a Divorce?

You can’t really control divorce; every case is different, and it isn’t exactly something you can plan for long-term. And while there is no good time for a divorce, there are definitely times that can be worse than others.

Four Times When Divorce can Deal a Major Blow to Your Finances.

  1. When the economy is down. You are already going to have to make some major financial decisions when you get divorced. You might have to rent or buy a new house, sell your own house, buy or sell your cars or maybe even take a new job. When the economy is down, all of those things are going to get harder.
  2. When you have bad credit. You need good credit for most major financial decisions, like renting apartments and even opening new credit cards. While divorce proceedings do not directly affect your credit score, many of the factors surrounding your divorce will. For example, assume you and your spouse had a joint credit account. If you do not deal with this credit account before your divorce, then you are still liable for contracts you made with your lenders. Your divorce decree does not end your relationship with the lender, so if your divorced spouse fails to make payments on the account, it will hurt your credit, too. Don’t let divorce make your bad credit worse and take care of these issues in a timely manner.
  3. When you have kids under 19. This is a no-brainer ”“ you will need to work on child custody issues like child support. On the upside, your children may later become eligible for student loans and grants that they would not otherwise have had access to had you not divorced.
  4. When the real estate market is down. Many divorcing couples sell the marital home, but if the market is low, you might find that you cannot sell your home for anything close to what you paid for it. That coupled with real estate fees, land transfer taxes and the general costs of moving can deal a heavy blow to your wallet.

The family lawyers at Divorce Matters serve the entire Denver, Colorado area.

What Happens to My Child’s College Fund in Divorce?

Every parent wants their child to have more opportunities in life than they did when they were growing up, and for many, that means planning for college. Parents fund their child’s college tuition in several different ways, but when the couple decides to divorce, it can be complicated determining what to do with the college fund. As experienced child custody lawyer’s, we can help.

What Are Your Options?

If you have opened a 529 savings account for your child’s tuition, you and your ex-spouse are going to have to decide what to do with it. You have a few options. One is to assume individual control of the account. If you do this, decisions regarding the fund can only be made by you. You will need to come to a mutual agreement with your spouse on who takes over the fund. Often, it makes the most sense for the noncustodial parent to take over the fund, because that way the 529 will not be considered on your child’s FAFSA, which can ease the burden of college tuition.

Other options for 529s include freezing the account or splitting it. Freezing the account means that no more deposits can be made and that the money in the account can only be used for the child’s education. This measure can help protect the money from an untrustworthy ex-spouse. Splitting the account is another option if the parents do not wish to relinquish full financial control of the college fund to one parent, and entails obtaining a judge’s order to separate the 529 into two new 529s.

Contact a Greenwood Village Child Custody Lawyer for Help

You will also have to consider the tax implications of your divorce. Whichever spouse claims the child as a dependent will be eligible for college credits given out by the IRS. Depending on the salary of the custodial parent, these tax credits can fluctuate, with higher-earning parents receiving lower or nonexistent tax credits the higher their salary is.

Sneaky Ways Your Spouse Might Hide Money At Work

We could go on and on all day about what a terrible idea it is to try to hide assets during divorce, but that won’t stop some unscrupulous spouses from trying to take more than their equitable share of marital property. This can happen in cases when one spouse has to make alimony (maintenance) or child support payments, but even beyond that, some people are just greedy, or angry at their spouses for one reason or another (it is a divorce, after all).

One place these spouses can attempt to hide money is at their jobs, disguised as other things or stuffed away in accounts that they don’t think anyone can see.

Four Places Where Money May Be Hidden

  1. Loans. During discovery, your spouse will have to list his or her debts, and some people will include sham loans made with an employer or a friend to withhold certain assets to make themselves seem like they have less than they actually do.
  2. Deferred salaries and bonuses. Some companies will allow employees to defer their pay until a later date. Greedy spouses could use this to postpone payments until after their divorce. It isn’t the oldest trick in the book, but it is predictable, and earnings statements will probably reflect that something is off about your spouse’s income. It certainly is not the most creative option.
  3. Expense accounts. Some companies offer these to allow workers to treat customers to fancy dinners or box seats at the next big game. Divorcees might think it wise to list those expenses as their own, despite the fact that it is the employer who is paying. Still others might opt for cheaper entertainment for customers and pocket the difference while failing to disclose it.
  4. Employee stock options. Some companies allow employees to pay reduced rates for stock. A sneaky spouse might omit the fact that he or she paid a reduced rate and list the difference as an expense.

Talk With a Denver Divorce Attorney to Discuss Your Options

Some spouses will do anything they can to come out on top financially during a divorce. Speaking to a Denver divorce lawyer can help you obtain the records you need to prove that your spouse is hiding assets.

Quitclaim Deeds Can Make Refinancing Home Easier

Financial difficulties are pretty common in divorce cases, especially involving the marital home. With one party now absent, whoever ends up with the house might face daunting costs related to taxes, upkeep and utilities. Many divorcees will refinance their homes, but depending on their credit, interest rates might actually go up, making it even more difficult to keep the home.

What is a Quitclaim and How Can it Help?

This is one situation that could benefit from something called a quitclaim deed. What this does is shift the ownership of the home from one party to another. This has a few potential benefits.

In a situation where one spouse has much better credit than the other, a quitclaim deed can be essential in getting lower interest rates from home refinancing. You go through the process to transfer the house to the party with better credit, and that party can apply for refinancing and likely get a better interest rate. However, this is not a simple process due to the nature of mortgage companies.

Quitclaim deeds can also be used when one spouse wants to add the other to titles of separate property, when property needs to be transferred as a result of a divorce settlement or when one spouse wants to be removed from a title.

Quitclaim Requirements

Additionally, quitclaim deeds can be used to convert marital property into separate property, exempting it from the process of equitable division of assets. For a quitclaim deed to be valid, it must:

  • Be in written form
  • List the involved spouses
  • Identify the property by address or by legal description
  • Be signed in the presence of a notary public
  • Be recorded in the county where the property is located

Contact a Colorado Family Law Attorney

If you have questions about property division during divorce or would like more details on quitclaim deeds, speak to a Colorado family law attorney. The team at Divorce Matters has the skills and experience to help you!

You Don’t Need to Be James Bond to Find Your Spouse’s Hidden Assets

In this increasingly digital world, there are more options than ever before for finding out if your spouse is hiding marital assets. But you don’t have to be James Bond and spy on them ”“ in fact, that can get you into a lot of trouble.

Be Wary of “Snooping”

It might be tempting to run to the spy store and purchase a cheap GPS tracking unit to hide on your spouse’s car, giving you an idea of where he or she has been ”“ visits to a bank you weren’t aware he or she had an account, for example. The more technically savvy spouse might even go as far as to install spy software on the home WiFi to sniff incoming packets for suspicious info. Here’s why you shouldn’t.

Domestic courts in Colorado are courts of equity, so snooping, while a legal gray area, could hurt you in the courtroom. If the courts become aware of your snooping, you could be seen as the bad guy/girl. This could factor into every aspect of your divorce ”“ child custody, property division, etc.

The High Road Approach to Finding Hidden Assets

It is not that difficult to find hidden assets when you have access to the particular set of skills of a divorce attorney. Attorneys can subpoena a great deal of your spouse’s electronic data, and it is very difficult to hide assets without leaving a digital trail of breadcrumbs. Emails, cell phone activity ”“ most of the things that you would probably be able to find by snooping can be found legally and effectively by a divorce attorney.

Speak with a Colorado Divorce Attorney

So don’t risk a charge for spying or stalking ”“ you’re not a 00 agent. Don’t risk your standing in court. Speak to a divorce attorney, and you will get the help you need to ensure an equitable division of your marital property.

How Is Foreign Property Divided in Divorce?

If you and your spouse own property outside of the United States ”“ a condo in Europe, or beach house in South America ”“ then when it comes time to get divorced, you will likely face a complicated situation in terms of property division. Because the property is in another country, Colorado courts don’t have jurisdiction over that property. However, this does not mean that the property’s value cannot be split.

If the value of the property has been established, then the courts can still consider that value when devising a plan for equitable property division. Say you own a $150,000 home in London and have $400,000 worth of assets in domestic property. The courts may use that $150,000 in the final property judgment by awarding the party that loses the foreign property a greater share of the domestic assets.

Colorado courts can also order one party to sell or liquidate foreign property under penalty of contempt of court if the order is ignored.

Additionally, depending on what country the property is in, the foreign government may have policies in place that allow them to help enforce a U.S. court order. However, that is outside of the realm of U.S. family law and would have to be dealt with accordingly.

In some situations, though, the court may devise simply that it has no power over the foreign property. It is unusual, but it has happened before.

Contact a Colorado Property Distribution Lawyer Now

Any issues or concerns you have related the to equitable division of marital property in divorce should be discussed with an experienced family law attorney. Call the professional legal team at Divorce Matters today!

Can I Empty My 401(k) to Protect It During Divorce?

If you have a substantial amount of money in a retirement account, it is natural to want to protect it in the event of a divorce. You might consider draining your account in order to keep it for yourself, but this is a bad idea that will almost always backfire. Here’s why.

In Colorado, property is divided equitably upon divorce. This is to ensure that neither party is left out in the cold financially. And when divorce is filed for, or when you are served divorce papers, there is an automatic injunction put into place that prevents you from taking drastic actions such as draining your accounts to hide assets. Hidden assets are a big no-no in divorce, because there is almost always a paper trail, and your spouse’s attorney is going to find it. This could have a negative impact on your eventual outcome in your property settlement.

What if My Divorce Hasn’t Been Filed Yet?

Even then, you still should not pull out your retirement funds. If you are entertaining the idea of hiding assets, chances are your spouse would probably not consent to you pulling out your retirement assets. Without your spouse’s consent, the courts could still decide to award your spouse part of your 401(k). This is because of something called dissipation when one spouse wrongfully drains an asset in anticipation of an upcoming divorce. Dissipation is usually the result of intentional misconduct. Dissipation can also be done through what is called “marital waste,” where the value of an asset is reduced or destroyed in an attempt to keep it away from one spouse.

Contact a Divorce Attorney in Lakewood Today

The bottom line is that hidden assets are bad news, and can almost always be found by your spouse’s attorney or the court. If you have concerns about your retirement account and what will happen to it in divorce, instead of taking drastic action, you should speak to a divorce attorney.

Can Divorce Affect Social Security Income?

Many Americans who have retired rely on Social Security to provide for living expenses. When a retired couple decides to divorce, one or both parties might wonder if the divorce can affect Social Security. It absolutely can.

Income disparities between genders often mean that husbands are entitled to higher Social Security benefits than their wives. This is not always the case, as some women make significantly more money than their husbands, but in general, working women receive more benefits based on the work record of their ex-husband.

Requirements for Receiving Benefits

Old-Age and Survivors Insurance (OASI), which is what many people refer to when they use the phrase “Social Security,” includes spousal benefits and actually allows ex-spouses to retain benefits from their former partner’s OASI. This can persist through divorce and even in the event of the ex’s death.

To meet the eligibility requirement for receiving benefits based on your ex’s work record, you must:

  • Have been married for at least 10 years
  • No longer be married
  • Be at least 62 years old
  • Have lower potential benefits from your own Social Security work record than your ex-spouse

Contact a Family Law Attorney in Fort Collins

If your ex has not applied for benefits, you can still receive benefits based on his or her work record if you meet the above requirements, your spouse is qualified for Social Security and you have been divorced for at least two years. If you are curious about your financial options following a divorce after retirement, consult with a family law attorney. Divorce after retirement is tricky but possible.