Everyone knows how devastating, frustrating and emotionally difficult divorce is. Sometimes though, we overlook the other, more logistical challenges of splitting up. Divorce represents a major change in nearly every aspect of life, including your financial stability and future goals. Taking control of your finances is one of the first steps to a fresh start. Here are five simple things that everyone needs to do post-divorce.
1. Get organized. Creating a master list of everything required by your agreement or judgment is incredibly beneficial. Most of the mandated actions are time sensitive, including transferring titles, deeding property, paying your ex and even exchanging personal belongings. Review your list and make a calendar so you know when to expect or make payments. Some of the required transactions can be made through direct deposit or payroll deduction, which can really lighten the load. Who wants to make multiple trips to the bank that will only remind you of your divorce?
2. Speaking of accounting, it's critical to make sure that joint accounts for banking and credit cards are closed. I stress the latter because I've seen many clients forget about credit cards. Often they weren't using the card during the relationship, didn't think to check on activity and ended up with negatively impacted credit.
Remember to remove your name from any joint credit card accounts if your spouse is going to continue using the account. Run your card through the shredder and write to the company managing the account to tell them you are no longer responsible for any charges (I would recommend using certified mail with a return receipt requested).
Also, be sure to close all joint bank accounts. If a joint account remains open, your ex can deposit and cash any checks made payable to you, or to both of you. I have seen too many IRS refund checks disappear this way.
3. Immediately after a divorce, it's important that you work with your lawyer to draft a new will. You should also change your health care proxy and durable power of attorney. No matter your situation, I'm guessing you don't want to leave your ex in charge of life-altering health decisions. You should also change any asset that contains a beneficiary component -- life insurance is the big one, but homeowners insurance may qualify as well -- to reflect your new status.
4. On the other hand, there are post-divorce benefits that can be easily maintained thanks to COBRA. However, these have time frames that are set firmly in stone. To maximize efficiency, status changes should be done through the human resources department of the employer handling the insurance. Managing this step promptly can ensure that you -- or your ex -- are able to keep receiving benefits.
5. Although not everyone does so, changing your name when you marry means that you may want to take back your prior to marriage name when you divorce. This can create a lot of paperwork. If you decide to change your name post-divorce, your driver's license and Social Security cards will need to be amended, as will any bank, retirement and credit card accounts to represent your return to your prior name.
Divorce is an ending, but it is also a new beginning. As with any journey, make sure you enter with a good roadmap.
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12)ANYTHING you own outright (or making payments on) before you get married, don't put her name on it if you want to keep it or not fight to keep it should you break up.
13) Keep an eye out on all expenses over $250. If it seems as if somehow it always ends up on your credit card (vacations, cars, items for the home, etc.)....*Warning*
14) The second she mutters/gloats that she makes more money than you or that you should pay 100% for something because you earn more...Ding!!!
15) Mention/ask early in the relationship on how she feels about a prenup in just an easy conversation (Ex: Some athlete whose wife filed for divorce and it's clear she only contributed sex to the marriage)...Most of all....LISTEN to her response!
16)Out of the blue statements like: "I don't want to work anymore", "I want to take some time off from work", "I want to be a stay at home mom", "I quit my job today"......Any comment from her about her NOT WORKING that comes as a shock to you.
17) If she is seemingly living at a level that her income won't/can't support. That means she probably got it from a man, was awarded it from a man via the courts, took it from a man, or still lives off of a man via childsupport/alimony/annuity payments.
*It's a start*
Before you start, I paid both child support and spousal support.
6) Listen for words that drop from their Yap like: I deserve..., I'm used to..., You can afford..., My this/my that on something you bought w/ your blood, sweat and tears.
7) If she comes from nothing, was doing nothing when you met her or has nothing but has this sort of "I'm a queen" disposition?....Watch out!
8) No matter how much they scream "joint", "shared" or "Co-*something*"...NEVER-EVER fall for that crap. Zero access to your checking/savings/retirment/business accounts.
9) Check out the value of the gifts she gives you. If your gifts to her are exponentially more quality than the crap she gives you (gifts seem last minute ideas or cheap quality)...You might be getting played.
10) File your taxes seperately even if married. And if not, then make sure the check is split right down the middle.
11) Proportionately divide the "living expenses" to be paid by each party based on the proportionate amount of income earned for the household.
To be continued:...
My divorce was my idea and I was aware of what would happen when I filed. I am guessing yours was not. I am sorry for your losses and understand that you are bitter--it is hard. A recent divorce?
I agree with many of your suggestions such as maintaining separate accounts, etc., but that will not always protect you, either, although it does help. Prenups are a good idea as is dividing the expenses proportionately. Be sure, though, you divide the household chores as well.
I hope you have or will rebuild your assets and your life.