Starting Fresh After Divorce? The Checklist You Need to Move Forward

Divorce can be incredibly difficult, especially if your ex-partner handled all the major financial decisions. And if your divorce is finalized, you may be wondering what comes next. It’s perfectly okay to feel a sense of relief now that the emotional roller coaster is behind you. However, as you step into the beginning of your next life chapter, there are still some important things to address.

Wrapping up loose ends may not be the most enjoyable task, but neglecting certain tasks could lead to inconvenience and expenses later on. To keep you and your financial plan organized, use the following post-divorce checklist as your guide.

• Change passwords: All passwords should be changed as soon as possible. Be sure to make it something your ex-spouse will not be able to guess.

• Update titles & deeds: This involves understanding who owns what (houses, cars, boats, etc.) prior to divorce, and updating it to match the requirements of the divorce decree. If the assets are not properly titled, you will need to start the process of changing them, which usually involves the county recorder or local DMV.

• Change your last name (if applicable): It may be a hassle, but changing your last name is a necessary step post-divorce, especially if required as part of a divorce decree or court order. Some of the items you will have to change include your Social Security card, driver’s license, passport, bank accounts, credit cards, utility companies, and insurance policies. You can make the changes on your own or use a website like Easy Name Change.

• Get health insurance coverage: COBRA coverage will last for 36 months after divorce; beyond that, you can research policies offered through Obamacare or a private insurance group.

• Develop a post-divorce spending plan: You can use an app like Mint to help with this. Be sure to begin with an adequate emergency fund before saving toward other financial goals.

• Secure your credit: This step is very important as it could impact your ability to use credit in the future. Close all joint credit cards and open new ones in your name, making sure that anything you close out is fully paid off. Unlink your old credit cards from any online accounts or automatic payments like Amazon, Target, utility bills, etc. Pull your credit report a few months after your divorce is finalized using a free service like AnnualCreditReport.com to make sure there is nothing you missed.

• Close joint accounts: All joint bank and brokerage accounts should be closed and new ones should be opened in your name only. You will probably need a divorce decree outlining how the funds should be split before doing this.

• Review home & mortgage: This item will definitely depend on a divorce decree. One spouse may be removed from the title by signing a quitclaim deed, or you may have to hire a Realtor and prepare it for sale.

• Life insurance: Some divorce decrees will mandate insurance coverage on the life of the spouse who is paying child/spousal support, ensuring that payments will still be covered in the form of a death benefit. Ideally, the support recipient should be the owner of the policy and pay all the premiums. If life insurance isn’t mandated in the decree, you can still take out insurance on the life of the support payer. Avoid using employer life insurance since it will lapse if the ex-spouse leaves their current employer.

• Property & casualty insurance: Update your coverage as necessary and make sure only what you own after the divorce is covered.

• Split retirement accounts & pensions: Employer-sponsored retirement plans and pensions must be split using a Qualified Domestic Relations Order (QDRO). Only a divorce decree is necessary to split an IRA.

• Update your estate plan: In addition to wills, trusts, and power-of-attorney documents, be sure to update beneficiaries on all accounts and policies as they will supersede the will and trust. If this is not done, there is a chance your ex-spouse could inherit everything if you pass.

• Review taxes: Check with your accountant to determine if you’ll need to make quarterly estimated tax payments or change your tax withholding from your paycheck since tax brackets are different when filing single versus married. Your dependent exemption may have changed as well.

• Update your retirement plan: Your assets and savings have probably changed along with your goals, so make sure you’re still on the right track for retirement.

• Gather a team of trusted professionals. Take the time to assemble a group of reliable professionals to have in your corner and guide you through this next chapter of your financial journey.

• Evaluate current investments: This step is necessary to determine if your investments are still appropriate based on your new circumstances and risk tolerance.

Need a Helping Hand?

If you’re going through a divorce and could use support with these tasks, we’re here to help you enter this new chapter. The advisors at Infiniti Wealth Management are dedicated to empowering you and boosting your confidence in your financial choices post-divorce.

Call our office at 845-278-8638 or send us a message to set up a complimentary consultation. You deserve a trusted team of financial professionals by your side.