Entry of your divorce decree is but the first step in your new post-divorce life. Shoring up your finances is the next step. Here are the top seven things you need to do.
- Close all joint financial accounts. Unless otherwise required by your divorce decree, close all joint bank accounts, securities brokerage accounts, credit cards, and other financial accounts—and reopen the accounts solely in your name. Use new passwords for the new accounts that are not familiar to your ex-spouse. For any accounts already in your name, change the passwords and remove your former spouse’s access to them.
- Be mindful of titles. Make sure all replacement titles to real estate, vehicles, boats, and other titled assets are timely executed and filed with the appropriate government agencies (e.g., recording deeds at the county clerk’s office, registering your vehicle with the Texas Department of Motor Vehicles, etc.).
- No more benefits. Remove your former spouse as a beneficiary on your will, insurance policies, bank accounts, securities brokerage accounts, retirement accounts, and similar financial accounts.
- Prepare for the afterlife. Update your estate plan. Draft a new will.
- Consult with a CPA. There are many reasons for consulting with a trusted CPA to get your post-divorce tax and financial house in order. Depending on your situation, for example, you may need to file certain tax returns, sell certain securities, adjust (or make) estimated tax payments, and/or adjust your withholding.
- Financial transactions and agreements with your former spouse. Take the time to create and maintain good records of, for example, payments required by your divorce decree for property, maintenance, child support, and expenses, or an agreement to deviate from the terms of the decree. If your divorce decree, for example, requires you to split certain of your children’s expenses, keep an expense log backed up by receipts. It will simplify your life when your former spouse challenges the expenses you paid—which will happen.
- Keep your divorce decree handy. Your divorce decree is the document that formally grants the divorce and governs your relationship with your former spouse going forward. It’s also the best evidence of the fact that you are divorced. You, in fact, may be required to provide it when taking some of the steps outlined above. Ask your lawyer to obtain a certified copy of it for you.