Tonight’s post about re-evaluating your financial self after divorce was written by our Savannah family law attorney, David Purvis.
A divorce can drastically alter your financial situation. You have just paid an attorney, you have now gone from a two income household to one, and you may have alimony and/or child support obligations. It is crucial that you make time during and after the divorce to consider what your financial future:
Revise Your Estate Planning
The should immediately revise your will, retirement accounts, and life insurance policies to remove your ex-spouse as beneficiary or heir.
Review and Update Existing Accounts
Existing Joint Accounts should be resolved during the divorce process, however, it is never a bad idea to double check that names are removed and addresses changed afterward. This includes: bank accounts, retirement accounts, credit cards, automobile titles and registration, insurance policies, IRS records, employer’s records, titles to real property, and utility bills.
Build Your Own Credit
Depending on how you and your spouse handled finances, you may need to build, or re-build your credit. If you two were living a lifestyle beyond your means, now is as good a time to re-invent how you will manage your finances. If your spouse was the one whose name was on car titles and mortgages when you were married and you have little credit history under your name, now is the time to start building your own credit history. Now is also a great time to run your credit report and insure there are no surprises on there.
Look to the Future
As with many things after the divorce, it is time to start looking forward to your future. Part of that means planning financially for retirement and rainy days. Oftentimes, married couples will have joint retirement plans. At the time of the divorce, these plans will be fairly divided. There are significant tax consequences for cashing out retirement plans early and so the division of the retirement account needs to be handled correctly.
Maybe your spouse did not place saving for rainy days or retirement as a priority, but you always wanted to. It is never too early to start planning for the future. The Domestic Relations Financial Affidavit you completed during the divorce as your financial snapshot can be a good jumping off point for planning ahead.
Now is a good time for reflection and planning on many levels. But one of the important ones is financial reflection, financial planning. Don’t get divorced without it!