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.  

Planning for College in Divorce

In my last post, I discussed the need to face the reality that sometimes divorcing parents cannot pay for college and fund their retirement.

In these cases, children can frequently obtain loans to pay for their college education.  In these situations, parents can still be a huge help to their kids by helping them learn about and maximize their college funding options.

One of the very best resources to learn about college funding options is the College Foundation of North Carolina (“CFNC”).  This non-profit has a tremendous website that helps students and parents learn about ways to pay for college and post-graduate education. 

CFNC’s website has valuable information on loans to students, loans to parents, grants, scholarships and other programs designed to help students pay for college.

In addition, CFNC’s website has tools to help all parents and students plan for college while they are still in high school through transcript and resume tracking.  Plus, when it is time to apply for college, the online tools allow applications to be completed and submitted online. 

Not every parent can afford to pay 100% of their kids’ college education expenses.  But, with the help of CFNC, every parent can help their kids find resources so that college can still be a reality.