Dealing with divorce
Managing the financial aspects of a divorce may be just as important as coping with the emotions. These resources can help you transition from “ours” to “mine” and “yours.”
Day-to-day transactions and financial accounts
- Divide all bank account balances as called for in the divorce agreement.
- Cancel joint checking, savings and revolving credit accounts, such as credit cards.
- Establish individual accounts in your name for ATMs, checking, savings and credit cards.
- Let your utility companies know if you’re assuming responsibility for the bills or if your name should be removed from the accounts. Make sure to update the accounts for gas, electric, heating oil, water, sewer, cable/satellite television, telephone and broadband internet.
- Convert family mobile plans to individual contracts, if applicable.
- Notify all of your creditors of your changed circumstances and responsibilities, including change of address, if applicable. Make sure you notify organizations with whom you may have automatic payment arrangements such as private schools, religious congregations and associations.
Other financial assets
- Revoke any joint authorizations or powers of attorney you gave to your ex-spouse over investment accounts and assets.
- Remove yourself from any joint accounts your spouse intends to maintain independently. (You may have to explicitly notify the institutions that you will claim no future interest in the account.)
- Remove your ex-spouse from any accounts you intend to maintain individually.
- Make suitable arrangements (opening new brokerage or trust accounts if necessary) for any securities due to you from the divorce settlement.
- Open new trust accounts for any assets you expect to receive on behalf of dependents.
Retirement plan issues
- Update the beneficiary designations of your existing retirement accounts and insurance policies.
- Seek a qualified domestic relations order (QDRO) for any retirement assets you are entitled to in your spouse’s employer-sponsored plans. (The QDRO is a tax-efficient way to preserve and enforce your financial interests in your ex-spouse’s pensions and defined contribution plan assets.)
- Create Rollover IRAs in your name to receive any assets you might be due immediately from your ex-spouse’s IRAs under the terms of your divorce settlement.
Property and other resources
- Update the deeds and title papers to reflect any changes in property ownership conditions specified in your divorce agreement. Notify any mortgage holders and lienholders of the changes.
- Notify all taxing authorities (city, country, school district, etc.) of any changes in responsibility for real estate tax payments.
- Update motor vehicle title, tax, insurance and lease arrangements.
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