Considering finances as a newly single person can be overwhelming, especially if your ex-spouse had primary control over most of the finances.
Divorce can be painful, but the financial aftermath doesn’t have to be. When it comes to ending a marriage, a little planning can go a long way in decreasing stress and ensuring financial confidence.
Below are a few steps you can take pre- and post-divorce finalization to help you start thinking about your finances.
- Consult a family law attorney: Before taking action, you should take steps to understand your legal rights and responsibilities. Family law attorneys are uniquely positioned to advise you on issues related to divorce, including the division of marital property, child custody and support and alimony.
- Hire a financial planner: A financial advisor can increase the ability of the attorney to translate and use financial information to move a case forward. Financial advisors who understand the vocabulary of family law and appreciate the rhythm of divorce proceedings can provide valuable input to improve the chances of a successful resolution to an otherwise difficult and unsettling process.
- Make copies: You need copies of tax returns, investment statements, employee benefits handbooks and all insurance documents. Also, obtain a copy of your and your spouse’s Social Security card, credit card and bank statements. If you or your spouse owns a business, gather as much information as possible about the business finances.
- Stash cash: Ensure you have access to money of your own. If your spouse moves out and stops paying bills, you will need to pay those bills until temporary support orders are entered.
- Establish or build credit: If you haven’t established credit, now is the time to do so. Get a credit card in your name only. If you have established credit, request copies of your credit reports and make any necessary corrections.
- Insure yourself: If your spouse’s health insurance policy covered you, you may need to secure your own insurance. COBRA or private insurance can be costly, so understand these costs before settling.
- Understand your assets and liabilities: Make a list of all household items, including jewelry, artwork, furniture, etc. Understand your liabilities, including loans, mortgage, etc. Bring this information with you when you meet with your family law attorney.
- Update bank accounts and credit cards: Cancel all joint credit cards and joint checking and savings accounts. Open individual bank accounts and change any direct deposits to your new accounts.
- Update your estate plan and beneficiary designations: This includes your will, medical directive, the general power of attorney, 401(k)s, IRAs, deferred compensation plans, stock options, and so on. If you do not update these items, your spouse will get these assets, even if you’re legally divorced.
- Transfer titles: Take the necessary steps to transfer titles for real estate, investment accounts, cars, etc.
- Change your passwords: Change the passwords on all your accounts, including checking accounts, frequent flier accounts, ATM card, and credit cards.
Ending a marriage is never easy. However, this financial divorce checklist helps lay the groundwork for a successful outcome right after the divorce and in the years to come.
Are you interested in working with a financial advisor who understands women’s unique challenges? Contact Vicki Shackley, director of SignatureWOMEN®, today.