In the previous episode, we discussed the initial things you should do when you get your divorce settlement. You will need to study your settlement in-depth and create a calendar of all the dates and deadlines that will be coming. It will be important to stay on top of everything, even as your divorce is wrapping up, because there are a lot of small things to handle. It’s not quite time to rest yet. Listen to the previous episode for more details.
This episode will be about setting up your new life. You may not realize all of the things that you will need to take care of. Many of these things are tedious and boring. However, they’re very important.
- Check your credit report.
- Set up new financial accounts.
- Update your will and estate planning documents.
- Check your beneficiary on all your accounts.
- Speak to a financial advisor.
- Speak to an accountant.
When you have finally gotten divorced, you will need to make changes to a lot of financial accounts. Regardless of your level of income, you should check your credit report. Look for any joint account that is still active, and close it or freeze it. Usually to close an account, you must have a zero balance. If you do not have a zero balance, you can freeze it to ensure there’s no additional spending on that card. You will still be liable for any account that is left open that has your name on it. You could face a difficult situation down the road if you don’t handle it now.
Change all of your accounts so that your spouse will not have any information about your account, such as the account number. If you have any joint bank accounts that are still open, split them up and close them. Don’t make it possible for your ex-spouse to take more than their fair share, even if you doubt that they would do such a thing. Also, change all of your passwords and security questions. It’s best to protect yourself.
Estate planning documents will outline what will happen to you when you pass away or are incapacitated. If you already have these documents, it is likely that your ex-spouse is listed on them. Update your will and other documents with an estate planning attorney. You will have to think about who will take care of your children, how your assets will be divided, and what will happen to you if you are incapacitated.
Your bank account, investment accounts, pension plans and insurance policies all have a beneficiary who will receive the funds if something happens to you. When you are married, your spouse is often the beneficiary by default. Update these appropriately.
It can be difficult to make a budget after a divorce that takes your goals into account. You will likely need to plan for your next house, your next car, or your retirement. If you don’t have a good financial plan, it is time to build one. Find a financial planner. Many will help you for free. We’ve talked about post-divorce financial planning in a prior series of episodes. A financial planner will help you achieve your goals.
Many of you are financially savvy. Even so, it’s advisable to consult an accountant the year after you get divorced. They will help you get all the right deductions and minimize your year-end tax bill.
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Thank you for listening!