Post Divorce Financial Checklist
- Interview and retain the services of a financial planner. A Certified Financial Planner Practitioner (CFP®) is suggested.
- Interview and retain the services of a tax preparer. A Certified Public Accountant (CPA) is suggested.
- Go over every detail of your Marital Settlement Agreement with your attorney and financial advisor to make sure everything is completed.
- Consider using applications such as Our Family Wizard to help facilitate co-parenting and information sharing between parents.
Credit and Debt
- Settle all outstanding bills with your legal counsel and other divorce professionals.
- Close all joint credit accounts. Make sure all credit card bills and loans are paid promptly and closed by you or your spouse if responsible.
- Open new credit card accounts in your separate name.
- Obtain a credit report 30 days later to verify no joint accounts remain.
Bank and Brokerage Accounts
- Close joint bank accounts and open new checking and savings accounts in your separate name.
- Close joint brokerage accounts and open new accounts in your individual name. Contact current company to facilitate transfer of assets in kind where necessary.
Real Estate and other Real Property
- Transfer ownership of all deeds for your homes or automobiles, boats, etc. and have them recorded at the appropriate county recorder or DMV office.
- Complete the process of refinancing or assumption of mortgages.
- Change beneficiaries on all Life Insurance policies, etc.
- Revise health insurance coverage for spouse and/or dependents depending on divorce decree. If insurance is not available through an employer; begin COBRA coverage or open a new individual policy.
- Obtain new property and casualty insurance for auto, homeowner’s etc.
- Obtain a life insurance policy on the payor of Child and Spousal Support as security for the payments that otherwise end on the death of the payor. The support recipient should be the owner and beneficiary and pay all premiums.
- Change beneficiaries on all Retirement & Pension accounts.
- Follow up with your attorney and/or QDRO drafter to ensure that the plan administrator has accepted the order and it has been filed with the court.
- Complete necessary transfers of IRA and other accounts per settlement once you receive a copy of your judgment.
- Execute a new will and/or trust. Designate guardians for your children if necessary. Be sure to update your health care proxy and your power of attorney documents.
Cash Flow and Taxes
Review and update your post divorce budget for income and expenses.
Execute IRS form 8332 to transfer dependency exemptions to non-custodial parent if necessary based on settlement.
Review your tax withholding allowances with your tax advisor or CPA and determine if estimated quarterly payments will be necessary.
This checklist was created by Justin Reckers, CFP®, CDFA™, AIF®
Justin is a Managing Director of Pacific Divorce Management; a San Diego based firm specializing in the financial aspects that arise for couples going through a divorce. Justin has developed a passion for guiding people through what can be the most emotionally and financially devastating period in their life. He provides education and support during difficult decision making processes in order to facilitate rational and informed conclusions for clients. Justin also serves as a Financial Planner for Pacific Wealth Management, LLC, a San Diego-based investment management, consulting, and financial planning company where he specializes in comprehensive financial planning. His practice includes a comprehensive post divorce financial planning program for clients dedicated to preparing for financial independence and long term success during the post divorce transition. This program was developed with his Family Law experience in mind having seen the negative effects of lack of follow through.
For more information on Justin Reckers or to get in contact with him, go to his homepage: www.pacdivorce.com
NOTE: Many state and federal laws use terms like ‘custody’ when referring to arrangements regarding parenting time and decision-making for a child. While this has been the case for many years, these are not the only terms currently used to refer to these topics.
Today, many family law practitioners and even laws within certain states use terms such as ‘parenting arrangements’ or ‘parenting responsibility,’ among others, when referring to matters surrounding legal and physical child custody. You will find these terms as well as custody used on the OurFamilyWizard website.