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Post-Divorce Financial Checklist: Part II

2 min read

By Adrienne Grace
Jan 12, 2021

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Once the documents are signed, and the divorce approved by the judge, your attorney's job is done.  But there are still significant steps to take care of.


You don't have to do this alone. Contact your CDFA for help with these additional tasks:

 

Insurance

  • Apply for COBRA or other health insurance, if necessary.
  • Change your insurance: auto and homeowner's/renters from a joint policy to one for you, even if your address is remaining the same.
  • Draft and execute a new will, trust, power of attorney, living will, and health care proxy.
  • Change the beneficiaries on your life insurance, 401k, pension, IRA (Roth and Traditional), 529 plans, and any other accounts which have a beneficiary designation.
  • If purchase or maintenance of life insurance policies is mandated, follow up to ensure that it has been completed. Ask for proof, and set up an annual compliance procedure to be sure that policies stay in force with appropriate beneficiary designations.

Assets

  • Divide your assets—and debts—as agreed in the decree. You may need a financial advisor (CDFA) to help with this.
  • Change the locks, access codes, and passwords on all secured items: real estate, vehicles, boats, safety deposit boxes, post office boxes, email, bank accounts, etc.
  • Remove your name, or your ex's name, from any joint accounts or mortgages. If the divorce decree requires a quitclaim or warranty deed, follow up until it is executed and recorded. Your attorney may assist with the deed. If refinancing is required, start the process as soon as possible.
  • Meet with a financial advisor (Certified Financial Planner, or Certified Divorce Financial Analyst) to put together a financial plan for your new future. If you had an advisor during your marriage, consider working with someone new, to avoid potential conflicts of interest. Review investments received as a part of the settlement to determine if they are appropriate for your new circumstances. Reallocate as needed.
  • If transfers of investment, retirement, and savings accounts are included in your divorce settlement (IRA, Roth IRA, other accounts), follow up until the transfers are made into your own accounts. Your financial advisor can be very helpful in tracking this.
  • If a Qualified Domestic Relations Order (ODRO) is required to divide 401k, 403b, pensions, or other retirement accounts, contact your attorney or a QDRO specialist to have the order drafted and sent to the appropriate place(s). Follow up, or have your financial advisor help you follow up, until the orders have been fulfilled and retirement funds have been transferred to your name.
  • Hire a new CPA or tax preparer to help with your tax return. Review and adjust your withholding allowances to reflect your new filing status, income level, payment, or receipt of maintenance, etc.
  • If you or your spouse is age 70 or over, recalculate your Required Minimum Distribution.

 

Budgeting, Banking, and Credit

  • Review your income and expenses. Update or create your budget to live within your means, or determine how much additional income you need and what you need to do to earn it.
       a.) Open a checking and savings account in your own name, if you don’t already have one.
       b.) Establish a credit card in your own name, if you don't already have one. 
       c.) Set up direct deposit or automatic transfer for payment, or receipt, of child support and maintenance.

Congratulations!  Your transition is underway. You are several steps further along your path to empowering yourself, financially.


If you are experiencing marital difficulties, please visit DivorceForcePRO to speak with one of our experts. To learn more about our Community, visit DivorceForce.com.

Written by Adrienne Grace

Adrienne Grace offers real-life financial planning advice designed to guide men and women through the hurdles of life’s transitions. She is an expert in financial transition due to divorce, loss of a loved one, retirement, and disability. Adrienne lives by the mantra, “It’s not about what got you here, it’s about what you do next.” Read Adrienne’s financial advice at FinancialTransitions.wordpress.com.

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