Divorce is one of those life events that may be one of the most difficult transitions any person has to make. Some of the divorces end up amicably, while others end up with such irreconcilable differences that the two parties never speak again. While lawyers usually end up in the middle of the finances when a couple gets divorced, here are five things I would recommend you consider reviewing after a divorce.
1. Check Your Credit Report– When people are married, it isn’t always discussed on who is the owner of a particular credit card or loan obligation. Reviewing all of your credit cards and loan obligations to make sure you are not joint on any of those items after the divorce, and ensuring your credit report is in good standing is an important step to take.
2. Review Your Beneficiary Designations– Remember that items such as your 401(k), IRA’s, and insurance policies have a named beneficiary. Despite what your will may say, these beneficiary designations are an operation of law. Consequently, you may have had your spouse as the primary beneficiary, and your kids or other family members as contingent beneficiaries. Unless the courts or divorce decree notes otherwise, you can name whomever you like as your beneficiary. This one is often overlooked when we meet with divorcees.
3. Close All Joint Accounts– If you have accumulated a bunch of accounts over the course of your marriage, I would recommend considering closing all and any joint accounts that you have. Any joint account would also be an operation of law, and go directly to the other joint owner in the event of your death. This includes bank, brokerage, and real estate accounts.
4. Review Your Will– Often, people put off doing a will when they are married. Especially after a divorce, it represents a great time to think about the legacy plan that you want in the case of your premature death. This includes all of your personal items such as jewelry, stamps, baseball cards, or whatever personal items you have in your estate.
5. Do A Financial Plan– It is difficult dealing with divorce, and dusting off the old life while you begin your new life. Financial planning often takes a backburner to work and social life. Given that you may have a new budget, living quarters, and change of assets, this is an important time to review your financial goals and reset your game plan.
There are many other issues around real estate, health insurance coverage, and retirement plans, but these are the key ones you should keep in mind. Find a company or financial advisor (or a Private CFO™ with us) who can really help you from both the emotional and financial perspective as you rebuild your financial future.
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Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder oXYGen Financial, Inc.
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oXYGen Financial, Inc. co-CEO Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.
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