Taking the Next Steps - Step Two: Assets
This is part two of a continuing series on life after divorce.
One of the incidents that led me to focus as a CDFA happened in my wealth management practice several years ago. A woman came in to see me, bringing with her a copy of her husband’s 401k, two years after her divorce, asking how she could get the half of the balance she had been granted in the divorce. Her attorney had negotiated the settlement, but the next step, to actually transfer the funds, was not the attorney’s role. The client simply did not know how to do the next thing.
- Cash assets – This includes all of the following: Checking accounts, savings accounts, credit union accounts, certificates of deposit, money market accounts, securities, stock options, brokerage accounts, mutual funds, U.S. Savings Bonds, precious metals and currency, cyber currency.
Where are the statements sent? Change address? Remove spouse's name? Open new accounts in single name? Change any beneficiary designations - check Agreement for restrictions. Still comfortable wth current financial advisor? Any conflict of interest? (Deal with investiment suitability below) Make arrangements for the transfer of funds. What documentation required to transfer the funds? Simple withdrawl and transfer of joint funds? Additiona documents needed? Both spouses may need to sign the withdrawl. A stock power, with signature guarantee (not just notarized) may be required. You may need the services of a financial advisor/CDFA™ to assist with the paperwork.
- Deferred income assets – These include pension and profit sharing plans, 401(k) plans, 403(b), 457 plans, deferred compensation, SEPs, SIMPLEs, savings plans, Keogh plans and IRAs (Roth and Traditional), stock options, incentive plans, annuities, cash balance plans, etc.
What does the Agreement provide for each of these assets? What needs to be done? Beneficiary designations can now be changed – does Agreement have any restrictions? Where are statements sent? Change address? Letters of instruction for change of ownership? (See above re: QDRO's) If retired, recalculate Required Minimum Distributions.
- Motor vehicles – Motor vehicles, boats, airplanes, motorcycles, recreational and other vehicles. Titles need to be transferred? Insurance separated? What kind/how much insurance? Refinance to be done of loan? Keys returned? E-ZPass account separated and tags turned in?
- Jewelry and collectibles – E.g. stamp, coin, gun, camera, sports memorabilia or other collection of almost any item. Is it in the possession of who gets it under the Agreement? Properly insured?
- Real estate – Refinance? Mortgage? Home Equity? Who pays? Current bills? Tax deductions? Judgment search? Escrow refund? Tax adjustments? Tax exemptions – remove or add? Change locks? Garage door openers? Alarm code?
If marital home is for sale, who pays for repairs? How is price negotiated? How are proceeds divided? What if it doesn't sell right away?
- Business and professional interests – How addressed in Agreement? Buyout lump sum versus stream of payments? How made? When? Secured? How? Changes need to be made with State for any licenses?
- Frequent flyer and rewards programs – Transfer? Buyout? When? Who responsible to do? Change email? Change on-line passcodes/account?
- Safe-deposit boxes – In whose name? Where? Empty the box/get the keys.
- Personal property – When exchange/remove? Notification? Any triggers if not done? Mediation if not resolved?
Check back next month with a listing of the next step you should take after your divorce.
Adrienne Grace brings 30 years of financial advisory experience to clients in transition. Whether that transition is in marital status, household partners, job change or elder year planning, Adrienne's holistic approach to financial transition planning guides clients through prudent preparation as well as rebuilding. With a measured approach to growth and preservation of assets, Adrienne works closely with her clients to develop a sound, comprehensive plan, created for each individual in transition. Adrienne's focus is to help clients navigate their transition eliminating financial pitfalls.
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