Steps to Take After Your Divorce is Finalized

Jan 26, 2023 12:25:31 PM

stressed woman

Are you recently divorced? If so, you’ve likely just been through a challenging time. After working through the details of your divorce, you may ask yourself–what’s next? 

For most people, there may be a long list of to-do’s once your decree has been filed and approved. Oftentimes it can be helpful to have a financial professional working alongside you to ensure your list is being worked on and completed correctly. 

There may also be a way to prioritize which to-do items should go first. Here are some general post-divorce items that may apply to your situation. Remember that it will be important that your divorce is finalized and that you have a certified copy of your decree in hand:

1. Change Your Last Name 

Suppose you are opting to change your last name. In that case, you’ll want to notify Social Security first and then update your name everywhere else (driver's license, banks, credit cards, utility companies, insurance companies, etc.).

2. Titles and Deeds for Property: Who Will Own What?

  • Who is the registered owner of your various assets?
  • What does your divorce decree outline for ownership?
  • Are these assets being kept or sold?
  • If keeping assets, there may be a transfer of title ownership that needs to take place. Record the transfer with the county or DMV.
  • If selling a home, you’ll want to hire a realtor and get the house ready to go on the market. If keeping a home, there may need to be a transfer of title ownership. If there is a mortgage, one party may need to be removed.

3. Evaluate Health Insurance Coverage

  • Were you covered on your ex-spouse’s health insurance? You may be eligible to continue the same health insurance through COBRA for a set period of time.
  • You may opt to switch to your employer’s health insurance plan OR get a private health policy.
  • Are your children remaining on your ex-spouse’s health plan? Or switching to your plan?

4. Update Joint Bank Accounts and Credit Cards

  • Your decree may call for the closing of all joint bank accounts and joint credit cards. If so, you and your ex-spouse may have to go to a bank branch together to have an account closed.
  • For joint credit cards, the primary cardholder can sometimes remove the second cardholder, which may be easier and more beneficial than closing cards.

5. Division of Assets

Assets may include retirement accounts, brokerage accounts, bank accounts, home value, etc.

  • Your divorce decree should outline who is getting what regarding your assets. Oftentimes some shifts need to be made between accounts (sometimes needing what’s known as a Qualified Domestic Relations Order).
  • What value is each person receiving from each asset?
  • Are there any assets that need to be sold and/or liquidated?

6. Estate Plan and Beneficiary Updates

  • You will need to draft a new will, health care directive, and power of attorney.
  • You’ll likely need to update beneficiaries on all retirement assets and life insurance.
  • You may need a Trust depending on the complexity of your estate OR if you have minor children.
  • If you have minor children, you may consider establishing a successor guardian.

7. Create a New Budget

  • Many times your income and expenses change post-divorce. So it’s a good idea to look at your new income sources and expense list. For example, are you paying or receiving alimony and child support? Make sure to include these.

8. Work with a Financial Advisor on a New Financial Plan

  • You may need to revisit your current financial situation and your future goals. There may be a need or an opportunity to create new goals for yourself.

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Investment Advisory services offered through Birchwood Financial Partners, Inc. an SEC Registered Investment Advisor.

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