You have reached an agreement with your former spouse about which assets each of you will receive following divorce. While one tough step is over, there is still work to do. Once you have your final divorce decree in hand, it is time to actually transfer ownership of assets. Even though you may be looking for a break after difficult negotiations, it’s best to immediately begin the transfer process before beginning your relaxation.
Transferring assets can get tricky if you don’t know where to begin. Start by making a list of assets that you are to receive as part of the divorce and the ones you will have to transfer from your possession or name to your ex-spouse. Make note of any deadlines you have for completing transfers. Some assets such as household goods and furnishings are relatively easy to transfer as they simply involve the physical moving of property from one location to another. Other assets require specific paperwork, court orders, and sometimes the involvement of others.
- Vehicles. When transferring the title and registration of a vehicle, be sure to bring the right documents to the Bureau of Motor Vehicles. You will need a copy of your divorce decree which shows that you are entitled to own the specific car, motorcycle, or other vehicle. You will also need to bring information related to the insurance you have obtained for the vehicle post-divorce. If you are in possession of the title of the vehicle, bring it with you. As long as you have the divorce decree which specifically references the vehicle and makes clear that you have the right to have title going forward, you should not need your ex-spouse to sign the title. If you do not yet have title because of a loan that is not fully paid, be sure to bring with you all the information about the lienholder. In order to put the title in your individual name prior to the full payment of the loan, your lienholder will have to consent using a specific BMV form. The BMV can help you with this process. Be sure to bring proof of your new address and new name if you have moved or changed your name.
- Retirement Accounts. If you have Individual Retirement Accounts (IRAs), you can transfer ownership using paperwork provided by your financial advisor. If you have a 401(k), 403(b), pension, or other retirement account, you will likely need to have a special and separate court order called a Qualified Domestic Relations Order (“QDRO”) to transfer all or some of the account. This order is generally prepared by an attorney and must be signed by the court. A QDRO allows you to transfer all or part of a retirement account without creating a taxable event if the money is being put into another retirement account such as an IRA. The worst thing to do is to simply withdraw money from your retirement account and hand it to your former spouse. This could create a problem for you at tax time.
- Real Estate. Transferring ownership of real estate often involves two different parts: title and mortgage. If you and your ex-spouse own the real estate free and clear, you will need to complete a Quitclaim Deed transferring title from the both of you to one of you and properly record it in the county where the property is located. It is generally wise to use an attorney to complete this process. A Quitclaim Deed only changes the name on the deed to the real estate. It does not affect any mortgage or other debt associated with or secured by the real estate. The most common debt is a mortgage and changing the obligated person on a mortgage requires you to complete a refinance or assumption process. Speak to a banker or mortgage specialist about this process.
- Bank Accounts. Different banks have different rules and procedures for transferring ownership of bank accounts. Some banks will let you and your former spouse transfer a joint account to one of you. Others will require you to close the account and open a new one. If you have automatic payments coming out of an account, be sure that you adjust them so that they are directed to the account you have after divorce.
- Life Insurance. There are two considerations when addressing life insurance. First, be sure that the proper person is the owner of the account after divorce. This generally requires some paperwork that your insurance agent can supply. Second, for any life insurance policy you own after divorce, be sure to change the beneficiary to the person or person you desire or as required by your divorce decree.