High-asset property division is an obvious consideration in any divorce involving substantial assets. A tandem consideration can be the careful assessment of an experienced family law attorney that ensures that what a couple has decided upon is legally effected and will not suffer later legal challenge.
Having a proven high-asset divorce lawyer onboard during proceedings involving a considerable amount of assets can, quite literally, pay off. Conversely, lacking a practiced set of eyes focused on the details can result in unintended and adverse consequences.
Take the case of a couple whose divorce matter was recently ruled upon the U.S. Supreme Court.
The Court’s ruling was at clear variance from what the couple agreed upon in writing in their 1994 divorce decree. Specifically, the wife agreed to waive all her rights to benefits under her husband’s company-sponsored 401(k) plan.
Unfortunately, that agreement was never followed through on by the husband, who failed to remove his-ex spouse as a beneficiary from his company account.
Ergo, a clear conflict was in play when the man died thereafter, namely, this: Under the divorce settlement, all the 401(k) was to go to his estate, with the 401(k) account itself still listing the ex-wife as beneficiary.
As far as the Court was concerned, it was an easy call: all the money — $400,000-plus — to the wife, notwithstanding the couple’s divorce agreement. The Court held that the retirement plan rules and requirements had precedence over the divorce decree.
There is certainly a clear lesson to be learned from the tale. Financially related considerations need to be closely looked at when divorce details are being worked out. A proven family law attorney experienced in property division is well placed to provide the high level of scrutiny required.
Source: Thomson Reuters, “Is your ex going to inherit your 401(k) plan account? Are you sure?” Oct. 28, 2011