Once a divorce is finalized, there are many changes that happen in short order. For many couples, a divorce usually means a change of residence, and for many it can mean a name change. Unfortunately, it can also mean a change in financial security, typically caused by many of the difficulties attributed to asset separation and debt distribution.
Important Steps Couples Should Take Post Divorce
In addition, assets often need to be transferred from one party to another. The following is a list of some of the most common steps that need to be taken following a divorce. It is not meant to be an exhaustive list.
- If your name or address has changed, you should notify your employer, the Internal Revenue Service, Social Security Administration, state tax department, state motor vehicle license department, insurance companies, banks, creditors, title companies, and any other entities with whom you have a business.
- If there have been changes in the ownership of real property, you should ensure that the appropriate deeds have been signed and are recorded and that the property insurer and taxing authority are aware of the changes. Utilities may also need to be transferred to the new owner.
- Your automobile insurer should be notified of the divorce and any title change. If automobile ownership is to be transferred, the title should be signed by the current owner to the new owner, a bill of sale should be completed by the current owner to the new owner, and the new owner should go to the county office and pay the required fees.
- You should cancel joint accounts or charge cards or remove the name of your ex-spouse from any accounts awarded to you.
- If you share a family phone plan, the owner of the plan should release the other party’s phone number to them so they can establish their account.
- If the parties were on a family health insurance plan, the administrator should be notified of the divorce. Generally, parties cannot remain on a family health insurance plan following divorce.
- You should update your tax withholdings from your employer if you claimed your spouse as an exemption or if you claimed any children as an exemption that you will no longer be claimed for tax purposes.
- If you are entitled to benefits through your employer, such as life insurance, 401(k) plan benefits, and defined benefits plan, you should contact your employer’s human resources department to make necessary changes. Failure to change your beneficiary designation before your death may cause your former spouse to receive these benefits instead of the person(s) you intend to benefit. If your divorce decree requires you to maintain a former spouse as a beneficiary, then you should follow the requirements of the divorce decree.
- Outside your employment, you may also have other assets with beneficiary designations, such as IRAs, annuity contracts, life insurance policies, and the like. Failure to change your beneficiary designation before your death may very well cause your former spouse to receive these benefits instead of the person(s) you intend to benefit. You should have the appropriate administrators verify the beneficiary designations and obtain any forms necessary to change the beneficiary designations on such benefits. If your divorce decree requires you to maintain a former spouse as a beneficiary, then you should follow the requirements of the divorce decree.
- If a transfer of possession of an insurance policy is necessary, you should immediately notify the insurance company.
- If you have been awarded retirement funds in your divorce that were in your former spouse’s name (or survivor’s benefits on a former spouse’s retirement), please be certain that you provide all necessary forms and documents required to the plan administrator to effectuate the transfer so that the funds are properly divided, and tax penalties are avoided.
- In the event you are to receive military retirement and/or survivor benefits on military retirement, you should make sure that all necessary forms required to effectuate the transfer are provided to DFAS, including, but not limited to the DD FORM 2293 and DD FORM 2656-1 or DD FORM 2656-10. If you have any questions regarding the procedures required for your retirement division, you should contact your attorney immediately, as there are deadlines for certain forms.
If you’ve done everything on this list already, then you are well suited to move forward in your post-divorce life. Preparing for life after divorce may seem overwhelming, but preparation and follow through are an important first step. If you haven’t done so already, you should also consider revising your will, durable power of attorney, and/or living will come following a divorce. It is also wise to carefully review your divorce decree and any incorporated settlement agreement upon receipt.
Disclaimer from Rebekah L. Graham & Associates
Rebekah L. Graham, Esq. has provided this blog for educational purposes. The intent of the blog is to give readers general information and a basic understanding of the law. It is not intended to provide specific legal advice. By using this blog site, you understand that there is no attorney-client relationship between you, the reader, and the attorneys at Rebekah L. Graham & Associates. The blog should not be used as a substitute for competent legal advice from a licensed attorney in your state.
If you need help with your post-divorce estate planning and greater strategy, contact the attorneys at Rebekah L. Graham & Associates. Call today at (256) 792-6075 to schedule a consultation!