The Mortgage: If the marital home or other real estate (vacation homes, investment
property) has a mortgage or lien (tax, HOA, Condominium) you must be sure
to satisfy the mortgage or lien or be removed from the obligation. Just
because your Marital Settlement Agreement (MSA) may say your former spouse
is “liable” for the debt does not mean you are free and clear.
The underlying obligation will stay on your credit report as your responsibility
until you are cleared from the debt. The bank is not a party to the MSA
and can go after either or both parties to collect in the event of default.
Include language in the agreement that ensures you are clear of the debt
by stating that your former spouse will pay or refinance the debt and
remove your name from the obligation. And do not give your former spouse
much time! Sixty to ninety days should be sufficient and if they cannot
refinance within that time it is highly unlikely they will be able to
do so. Never sign a deed until the mortgage or lien has been paid or during
the process of refinance or payment. A competent family law attorney will
be able to give legal advice and guidance as this area of the MSA can
be very tricky and can cause you great financial harm if not done correctly.
The Will: Another set of documents that should be updated or created during and
after a divorce are your Last Will and Testament or Estate Plan. A divorce
in Maryland usually revokes any gift to former spouses unless there is
a clear indication to the contrary. It is still advisable to update the
documents to change such designations as Trustee or Personal Representative.
A lawyer familiar with family law and estate work will be able to correctly
advise you of changes that may need to be made. Also, review your beneficiaries
for life insurance policies and update as needed (unless prohibited by
the terms of an agreement or judgment precludes a change) as well as retirement accounts.
The Credit Cards: In many cases people have multiple cards which allow the spouse to be
an authorized user. Be sure to remove your spouse as an authorized user
of any of these credit cards as soon as possible. Depending on circumstances
this may be advisable before the divorce is granted.
If you have any questions about these areas or any family law matter, please
call the Law Office of Nicholas T. Exarhakis for a free telephone consultation