Right now, a lot of divorce cases are rushing to a close. Most people want to finalize their divorce before December 31. The year that you are officially divorced is the first year you file taxes on your own. However, just because your divorce is wrapping up, it does not mean that the process is over.
In this episode and the next, we will cover what to do after your divorce is over. Your post-divorce tasks fall into two categories. You need to ensure you receive everything you agreed to (and that you give up everything that you agreed to). You also need to update all of the documents in your life to reflect your new situation. This episode will be about the first category.
Once you have the settlement in hand, you need to sit and study it, line-by-line. You want to find time when you will not have distractions. Take notes as well. Set up your notes with a column for what you need to do, what your spouse needs to do, and optionally, anything that your attorneys need to handle. As you go through the settlement, make notes of whatever you need to do. Do you need to transfer money from your bank account, or make sure that your spouse does? Do you need to set up a parenting schedule? Go through each line to make a list of everything that you need to do. There will be a lot of little things that need to happen.
Once you are very familiar with your settlement, and you have that list, you will need to create a calendar. This is a complicated step. Your calendar will have a lot of different dates on it. In some cases, you may have to start the process far ahead of the deadline. For example, if you are transferring a 401k, that process can take a few months.
Other dates will be routine and repeating. If you have a custody schedule, you will have to map out every date that the kids are supposed to be in one place or another, for years. Your life will revolve around those dates, so they are important to have in your calendar, even if the dates are far in the future.
Some asset transfers are slow, especially with large, illiquid assets. The most common one is a house. It will take time to sell a house, often 6 months to a year, before you will see the proceeds. In some situations, you may be transferring ownership of the house, but this can present complications. There was one case where a condo was being transferred. It took 8 months and nearly $500,000 in legal fees because of the complexity of the transfer. It was important to keep the deadline in mind, even though there was a complicated process going on.
Likewise, if you are selling a house, you will need to start preparing the house for sale early, so that you have ample time to sell the house and receive the highest price possible. Otherwise you may be forced to do something that is financially unwise.
For the calendar dates that will take time, you can create milestones for each issue. For example, if you are splitting up a 401k, you will need a QDRO – which can take months to obtain. The first milestone would likely be finding a QDRO attorney. Your second milestone could be to submit documentation to that attorney. The third would be obtaining pre-approval, and so on. Creating milestones for large tasks will help you stay on track to meet your deadlines. Many of the tasks on your list will need to be broken down into milestones, so your calendar will be complex.
If you aren’t a very organized person, you may want help breaking your task list into manageable parts. Ask a friend or hire a personal assistant to help you set up your system. If you choose to hire a professional organizer, you may work with them for a few days in the beginning, and then just once per month to keep you on track.
In the next episode, we will discuss what you need to do to set up your new life – setting up financial accounts, checking your credit report, and updating important documents.
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Thank you for listening!