Put Your Financial House in Order: Post-Divorce Guide to Financial Issues
Your divorce or family law issue is now complete. The judgment was entered or agreement signed. The battle is over (assuming your matter was a highly contested one). What do you do now? Is it alls well that ends well? Not quite. The divorce or family law matter may be over, but you still have some work to ensure that you protect yourself and your family post-divorce or post-family law issues. These straightforward steps are oftentimes swept aside and understandably so – you’ve just been through an emotional roller coaster and you don’t want to think about any of that “divorce” or “family law” stuff anymore. You owe it to yourself and your family to take the time to tidy up your financial house now. You will thank yourself later on. Your heirs will thank you in the event of your untimely death (you must plan for the unexpected).
So you’re now convinced that you should take a bit of time and tie up the loose ends, but what should you be doing? First, it may be worth a trip to your C.P.A. or tax preparer to sit down with him or her to discuss what needs to happen on the tax planning side (i.e. support payments that are or are not tax deductible or included as income, changes in the basis of property due to property division or property transfer orders, etc.). Making the right decisions now, can potentially save you time, money and headaches down the line. Second, if you don’t already have one lined up, it may be well worth the time and money to engage the services of a financial advisor sooner than later. After all, you’ve fought hard to either get or keep what is rightfully yours. Do what it takes to make sure you keep it/grow it consistent with your intended goals. Third, don’t overlook what may seem like straightforward steps that you must take, but may not because of time, having to deal with your ex (in signing over paperwork or communicating with him or her) or some attendant costs (i.e. recording fees for deeds, notary fees, etc.). These include, but are not limited to the following:
- Re-titling the house or properties awarded to you to conform with how you wish title to be held (these have implications upon your untimely death).
- Making sure the title documents on vehicles, watercraft, etc. are signed over and submitted to the D.M.V. or property authority.
- Changing the insurance coverage on assets awarded to you or health/car insurance coverage (i.e. removing your ex if authorized by Court order).
- Updating the beneficiary designations on bank accounts (payable on death bank accounts), retirement accounts, deposit accounts, benefit accounts, life insurance policies, etc. to ensure your ex is removed and your intended beneficiaries are listed. Do NOT assume that because the Court order or Judgment awards you an asset that that is sufficient in-of-itself. It may not be. If you don’t update your beneficiary designations your heirs may find themselves in probate fighting with your ex over those very same assets awarded to you.
- Updating your estate planning documents to reflect your new intent (revoking trusts, revising wills, updating or drafting powers of attorneys, etc.).
- Canceling joint credit cards and other debts/obligations (pursuant to the terms of your Court orders).
- Effectuating the rollover of funds that were awarded to you (pursuant to the Court orders), such as I.R.A.s, cash accounts, stock, etc.
- Ensuring that pensions, 401(k)s, deferred compensation plans are divided pursuant to the terms of your Court orders (waiting may have serious and costly consequences: liquidation of the funds by your ex, loss of use claims against you for delays in the division of the funds, death of your ex – which may complicate the division of your share of the funds, etc.).
What you do now matters. A good family law or divorce attorney should be advising you of the resources available to you in tidying up your financial house. It doesn’t end with the formal representation. Call our offices and find out how we may be able to help you.