So, either your spouse’s employer or your employer suddenly tanks, collapses, goes out of business. What then?
The first point is that you should have kept complete records and be sure that all designations were current. What kind of records?
(1) Salary and compensation, in the form of contracts, letters of employment, personnel manuals, payroll records (periodic payroll slips);
(2) Medical insurance, in the form of policies, COBRA requirements for assumption of insurance on an individual basis, declaration pages, documentation as to covered persons, coverages, carrier contact information;
(3) Life insurance, in the form of policies, declaration pages, documentation as to beneficiary designations;
(4) Retirement benefits, in the form of plans, summaries of plans, periodic statements, beneficiary designations; QDRO requirements;
(5) Documentation as to other benefits such as cafeteria plans, sick leave, vacation leave, company vehicles, computers and other property, etc.
The economic problems of sudden unemployment on a family can be bad enough but the unknown and usually unforeseen “hidden” effects can be devastating. For instance, what happens to 401(k) plans and pensions. How is your ability to COBRA insurance affected? What are the time requirements for acting so as not to be denied benefits and assets? What is the effect of not having correct and complete beneficiary designations on life insurance and retirement assets?
So, whether you are in the middle of a divorce, or contemplating one, or just happily married, the lessons to be learned are these:
(A) Make sure that you know as much as you can about all aspects of employment, and that you fully understand all of those aspects;
(B) Make sure that you have complete documentation to backup your knowledge and for proof purposes later on;
(C) Make sure that all designations are complete and current;
(D) Plan ahead — make sure that you know NOW what to do about COBRA, retirement benefits, etc., should the unthinkable happen.