9 Things You Must Do
To Manage Your Finances
After A Divorce
Were you divorced in the recent or not-so-recent past?
Have you thought to change your financial documents to reflect that fact?
Here is a list of MUST-DOS to manage your finances after a divorce:
- You should remove your spouse’s name from any financial accounts that belong to you only. For instance, if the court granted you any certain bank account as a part of the financial settlement, be sure your spouse no longer has access to it. Same with retirement accounts and any other accounts that now belong to you only. What about access to bank safe, for instance? This one is almost easy to forget since you likely don’t go there regularly.
- Power of Attorney: during your marriage, had you given a power of attorney to your spouse to act on your behalf? If so, be sure to revoke it, unless you still trust your ex-spouse and wish for him or her to remain on the power of attorney.
- Update your living trust or your will. No living trust? You should consider having one, especially with minor children involved. This is how you can control how your money will be spent for your children should you meet an early demise, or become incapacitated to the extent you become unable to manage your financial affairs.
In a living trust, you can name a specific trustee to handle the finances of your children until they reach adulthood.
Most people want a say in how their estate will be used on their children’s behalf. If you leave this open, your ex-spouse will be put in charge, and might make decisions contrary to your wishes.
- Also with minor children, consider naming a guardian who is not your ex-spouse (you can do this in a Pour-over Will, a document often attached to a living trust), especially if your ex-spouse has a substance abuse problem.
You should keep any proof that your ex isn’t a proper parent with either your attorney, or the person you are naming as guardian (preferably both), so they can successfully petition the court for the guardianship of your children should the need arise. If you can afford it, it wouldn’t be a bad idea to set aside some money for the litigation.
- Do you have a living will? Most people name their spouse as Health Care Agent in their living will. If that’s what you did, be sure to update your Health Care Agent. After all, this person would be the one called if you were in a serious accident, and couldn’t communicate with the world.
- Do you have How about your life insurance policy? Many people name their spouse as beneficiary. Be sure to update your list of beneficiary(ies) as soon as possible, unless the court ordered you to keep a life insurance policy with your ex as the beneficiary (yes, this happens). It’s usually seen in the case of an incapacitated ex-spouse receiving alimony from you, or if your ex demanded it for the care of your children after your demise.
- If you have a 401K or IRA, or any other retirement account, be sure to take care of any needed changes with the administrator of your retirement account. If your marriage lasted longer than ten years, more than likely your attorney told you that you needed a QDRO after the divorce, and depending on what state you live in, it was perhaps executed along with the final decree of divorce.
But if that’s not the case, reach out to the company that administers your retirement account and provide them with your final decree of divorce, and with your new beneficiary.
- Contact the accountant or CPA who creates your tax returns. Let him or her know you divorced and ask how it will affect you. If you do your own taxes, do an online search on the subject.
- Do you have assets of considerable value? Meet with your financial advisor to make any changes you wish to make now you’re the only one making decisions about your money.
We can help if you live in Nevada and haven’t filed your divorce yet. https://nevadadivorce.org.