Do It Yourself Divorce Trap: Retirement Accounts

I received a call this week from a couple that handled their divorce without attorneys.  They had a mess.

They intended to divide the husband’s 401(k) retirement account as a part of the divorce.  However, they did not know that dividing this kind of account requires a special legal document called a Qualified Domestic Relations Order or “QDRO”. 

So, they obtained their divorce.  They then contacted the 401(k) administrator to divide the funds.  Only then did they find out that they needed a QDRO. 

Unfortunately, it will be far more complicated for them to divide this retirement account now.  What would have cost them less than $1,000 if they had involved attorneys in the beginning will now cost them several thousand dollars or more.

They called me to find out whether the account could be divided, whether a court could enter the QDRO now, and how much it would cost.  Needless to say, they were upset that their efforts to save money would cost them much more in the long run.

This just one real life example of why it is smart to consult a lawyer to handle the legal intricacies of divorce from the beginning.

Randolph (Tré) Morgan III is an experienced family law attorney accepting cases in Raleigh, Cary, Apex, Garner, Fuquay-Varina, Clayton, Smithfield, Wake Forest, RTP, Durham, Chapel Hill, Holly Springs and surrounding areas.  He focuses his practice in divorce, child custody, alimony, child support, equitable distribution, property division, paternity, guardianship and other family related matters.  

Online Legal Divorce Forms and Separation Agreements - Privacy Problems

Last week, I wrote about the need to consult an attorney prior to using an online separation agreement or divorce forms.  This week, I’ll discuss another problem with these forms: Privacy.

I have seen many clients that use these forms without an attorney.  Most of these clients record their separation agreement, child custody (co-parenting) agreement or property settlement agreement with the Register of Deeds.  They do this because something in the online form, the form's instructions or something else on the internet told them that this recordation was necessary.

Unfortunately, once a separation agreement is recorded with the Register of Deeds, it becomes public record.  That means that anybody with a computer can easily look up, read and print your separation agreement if it is recorded with the Register of Deeds.  Anybody.  For any reason.  Friends, family, foes, members of your church, co-workers, etc…And I can tell you that people love to know the intimate details. Do you really want to give them access to that kind of personal information? 

There are some parts of a separation agreement and property settlement agreement that may need to be recorded with the Register of Deeds.  But, a good family law attorney can help you avoid making your entire agreement public knowledge.

I routinely advise clients to avoid this kind of public disclosure of their private lives.  After all, if you wanted the details of your separation to be public knowledge, then you could just go to court.  But, in North Carolina, there are ways to avoid making the terms of your separation public record. 

However, you would not know that unless you consulted a North Carolina family lawyer.

Online separation agreements and divorce forms can be useful.  But, there are risks in using these documents, and the loss of privacy is one of them.

Consulting a North Carolina family law attorney before using these online forms can save your privacy.



Want to Save Money on Legal Fees? Negotiate Early.

This is a very common scenario in family law cases: The parties enter litigation when someone files a lawsuit. The lawsuit begins an endless stream of legal pleadings, court appearances, document preparation, depositions and all of the other parts of litigation that drive up legal bills. The parties are too mad or stubborn to really try to work out a resolution for fear of appearing weak in the eyes of the other side. So, everybody builds up their arsenals in preparation for mutually assured destruction in the courtroom.

On the day of hearing or trial, the judge asks the attorneys where the parties stand on a settlement. The judge then recommends that the parties either try to work something out in the hall or in chambers with the judge.

Then the lawyers seriously discuss the hard issues in the case and try to work out an agreement. You would be amazed at how many settlements are reached on the day of a hearing or a trial.

Sometimes this is unavoidable. But, most often it can and should be avoided. If the parties had instructed their attorneys to really explore a resolution at the beginning of the case, then much of the huge legal expense of preparing for the courtroom would have been avoided.

Is it always possible resolve a case without going to court? No. Some cases and issues are so tough and so complex that a judge needs to make a decision for the parties. However, in the majority of cases, clients can save thousands, if not tens of thousands of dollars by instructing their attorney to really work at exploring settlement options at the beginning of the case, rather than on the day of trial.

After all, if you are going to settle the case on the day of your court appearance after months (or years) of litigation and tens of thousands of dollars of legal fees, why not cut to the chase and seriously explore settlement up front?

If you are interested in legal representation, please contact me by email or at (919) 781-1311. You can also find me at www.nichollscrampton.com (this site currently being updated).

Please note that nothing on this blog should be considered legal advice and that viewing the information on this blog does not create an attorney-client relationship between us. You are advised to consult with an attorney to confirm the current state of any legal information contained in this blog, as the law constantly changes.