Guest Blog | Divorce Decisions
Going through a divorce can be hard on everyone involved, but we’ll be here for you.
Knowing where to start and what information to gather will help you maintain financial stability through this tough transitional period and allow you to start focusing on a brighter future.
7 STEPS TO CONSIDER WHILE GOING THROUGH DIVORCE
We’ve put together a checklist that you and your financial professional can use to devise a new plan that is designed to benefit you for years to come.
Knowing where to start and what information to gather will help you maintain financial stability.
IF YOU’RE THINKING ABOUT GETTING A DIVORCE
STEP 1: GATHER TAX AND INCOME INFORMATION FOR YOU AND YOUR SPOUSE
Federal, state, and local income tax returns for at least the last two years
Proof of current and past income
Pay stubs (at least 12 months back)
STEP 2: GATHER STATEMENTS AND INVENTORY ASSETS/DEBT
Checking and savings
Brokerage accounts or investments
Certificates of deposit
Mutual funds and annuities
RETIREMENT PLAN STATEMENTS AND SUMMARY PLAN DESCRIPTIONS:
401(k), 403(b), 457 plans
Profit sharing or money purchase plans
IRAs (Traditional, Roth, SEP, SIMPLE)
Defined benefit pension plans
Deferred compensation plans
REAL ESTATE (JOINT & SEPARATE):
Real estate deeds
Real estate tax bills
Utility bills, phone, cable, internet
Car and recreational vehicle titles
Jewelry, artwork, and other valuables
Televisions and computers
Homeowners or renters
Health and medical savings account statements
Documents pertaining to ownership in a business
Credit card bills
Social Security statements
STEP 3: GATHER LEGAL DOCUMENTS
Gather any documents that could impact your divorce, such as:
Documents pertaining to prior divorce(s)
Marital property agreements
ESTATE PLANNING DOCUMENTS:
Powers of attorney documents
Last will and testaments
Beneficiary designation forms
These steps allow you to start focusing on a brighter future.
WHEN YOU’VE DECIDED TO GET A DIVORCE
STEP 4: WHEN THE DIVORCE IS IMMINENT CONSIDER THE FOLLOWING:
Close or freeze jointly held accounts and credit cards.
Monitor your credit on an ongoing basis.
Change user names and passwords on financial accounts and social media.
Open new accounts and credit cards in your individual name that only you can access.
Arrange an alternate residence, if required, and budget for the essentials.
Establish a mailing address or P.O. box that your ex-spouse cannot access.
Begin looking into getting health insurance if your coverage is from your spouse’s plan.
Estimate alimony payments or receipts and account for this in your budget.
Determine ongoing care and child support.
You may need additional professionals beyond your attorney and financial professional…
• Business valuation expert: If ownership in a business is involved.
• Forensic accountant: Can delve into your household finances to make sure no assets are being concealed. This is more important if you did not handle the household finances.
• Vocational expert: Can evaluate a non-working spouse for employability.
AFTER THE DIVORCE IS FINAL
STEP 5: SPLIT ACCOUNTS, UPDATE ACCOUNT TITLES, AND CHANGE YOUR NAME
Contact each company holding your financial accounts and retirement plans to determine their process for splitting accounts. They will likely require a copy of a qualified domestic relations order (QDRO) or divorce decree.
IRAs (Traditional, Roth, SEP, SIMPLE)
Qualified plans (401(k), 403(b), 457, defined benefit, etc.)
IF APPLICABLE, CHANGE YOUR NAME ON:
Social Security card
Titles to automobiles
Deeds to real property
Retirement and investment accounts
STEP 6: UPDATE BENEFICIARY DESIGNATIONS AND ESTATE PLANS
A divorce decree or QDRO does not remove your ex-spouse as beneficiary on your accounts with beneficiary designations. Be sure to review all beneficiary designation forms and estate planning documents and update them accordingly. Estate planning made prior to the divorce is now likely obsolete. Meet with your estate planning professional to update your estate planning documents, such as:
Last will and testament
Powers of attorney
STEP 7: MEET WITH YOUR FINANCIAL PROFESSIONAL TO UPDATE YOUR FINANCIAL STRATEGY
Now that you are divorced, previous financial strategies may be obsolete. Meet with your financial professional and update your overall financial strategy to reflect your situation after the divorce.
About the Author
Transamerica has stood for innovation since 1904, when a young entrepreneur named Amadeo P. Giannini founded a bank in San Francisco to make financial services available to everyone.
Today, Transamerica encourages customers to consider their long-term health in pursuit of their financial success. Because just like with planning and saving, they believe the little steps taken today can make a big difference for tomorrow.
We will provide you useful and timely information you can use to be #financiallyfearless