Don’t Miss these Final Financial Details in Divorce
February 8, 2010 10:58 am BlogBy Lisa C. Decker, CDFA™
Moving into the next chapter of your life means wrapping up old business so that you can stay focused on the future. Here are a few helpful tips to make sure that you don’t leave open any doors that really should be closed for good.
Some parting items that you and / or your attorney may need to deal with when your divorce decree is handed down.
Assets:
· Remember to separate all accounts and change titles where applicable.
· For investment accounts it is most important to change your beneficiary designations as these will override what is written in a will. If this step is missed your ex could end up with assets you did not intend for them to have.
· Don’t forget to have your attorney file QDRO’s if you have qualified funds to split as a part of your divorce settlement agreement.
Debts:
· Remember to separate all accounts and change titles where allowed.
· If you are still liable for joint debts that could not be separated before the divorce was final, then make it a top priority to get your name removed from as many joint debt accounts as possible now and when able in the future (such as when the primary residence can be refinanced).
· Make sure to review your credit reports from all three agencies in 3-6 months after the divorce is finalized and correct any errors you may find.
Liabilities:
· Make sure that your divorce decree handles what will be done with any joint taxes that may be owed or refunded. This includes federal, state, local, property and potentially others.
Protection:
· Be sure to visit an estate planning attorney and have your wills changed.
· Change beneficiaries on all life insurance policies. As with investments, these beneficiary designations override a will.
· Change and remove spouse from other insurance policies – Health, Homeowners, Auto, Umbrella, etc.
Support:
· If you are receiving spousal and child support and need to go back to court to ask for modifications in the future, please beware of the IRS child contingency rules that could put you in a potential tax trap if you are the one paying support. Make sure to check with your CDFA or CPA if you do ask for a modification around either of these items so you don’t inadvertently end up with a hefty tax bill.
These are items that are frequently forgotten amid the turmoil of divorce. It is vitally important that you follow-up on these things as soon as possible to avoid unintended consequences that can come back to haunt you years later.
©2008-2010 Lisa C. Decker, CDFA™ All Rights Reserved.
