Qualified Relations Domestic Order

The Post-Divorce Checklist

The Post-Divorce Checklist
The Post-Divorce Checklist

Your divorce is final. What’s next? How do you move forward? How do you find the right path to follow?

Initiating the next steps can be daunting, overwhelming, and frightening, but the idea of starting fresh and new is worth the trek through the mud. Planning a new lifestyle can bring about feelings of excitement, inspiration and normalcy. With the support and guidance of a professional, transitioning to life after divorce can be simplified.

When dealing with a divorce decree, one of the things we focus on at Strada is creating a post-divorce checklist before the divorce is actually final. In the last stages of your divorce, there are many things you can do to help prepare yourself for the next phase.

The purpose of this blog is to shed some light on some of the things one might have to complete, per their decree. What we like to do is sit down with the client and the nearly final draft of the Marital Settlement Agreement (MSA) (or divorce decree) to determine the most pressing tasks. We then create a checklist using those tasks as our guide. You can do exactly the same thing at home.

As a companion to this article, please feel free to download and use this Post-Divorce Checklist PDF to keep track of all of the important tasks associated with life after divorce.

Your post-divorce tasks might fall into these major areas:

  • Cash management - budgets, spending needs including potentially a home
  • Tax organization
  • Understanding your investments and redefining your portfolio to suit your needs
  • Insurance analyses - health, auto, home - do they still work for you?
  • Coordinating new estate plans - often pushed off but critical to address within 6 months of divorce finalization

Sit down and read your decree, divide your tasks into the above categories and tackle them one at a time.

For example: Cash management: change banks, open new accounts, close credit cards, analyze new expenses including groceries, and let things settle for 6 months before making big decisions; Taxes: determine who is filing, by when, what documents do you need to share, how will you archive. What can you do to prepare for your new tax status as Single or Head of Household?

There are many things that need to be completed after a divorce, but one of the most pressing concerns is “How and when will I get my money?” This could entail:

  • Multiple transfers and title changes on accounts
  • Transferring ownership of different investments
  • Coordinating the paperwork around opening up new accounts and having funds transferred in

This is the time of year where we start the tax organization process with our clients. Post divorce, this can be even more confusing. With regard to income tax and obligations and returns, one person might be obligated to file and report to the other. There are so many executable action items that need to be considered pursuant to a divorce:

  • Beneficiaries on insurance policies and/or individual retirement accounts
  • Executing to qualified relation domestic orders
  • Transferring IRAs
  • Stock option executions
  • Distribution requests
  • Name changes
  • Removing signors on accounts
  • Transfer of titles on property
  • Health insurance changes

Once through the administrative matters of the divorce, you can focus on your future, how you want to live and how you visualize your new life ahead.

Dealing with all these issues can be overwhelming, but a controlled, well-defined approach will help you complete each one in an accurate and efficient manner. If you have any questions about post-divorce tasks, please feel free to give us a call.

Jennifer Failla, CDFA™
Principal, Strada Wealth Management
Toll Free: 866.526.7098
Email: info@stradamanagement.com

I’m Officially Divorced. Now What?

I'm Official Divorced. Now What?
I'm Official Divorced. Now What?

Once the divorce decree has been finalized and filed with the court, clients will often call me and ask, 

“What now? What happens next? Is my work with my attorney complete? So are we done?”

The short answer to that is yes. You have to consider the divorce process as somewhat transactional. Once the decree is filed, the relationship with the divorce attorney really comes to an end unless there is something that is further needed (i.e., modifications to the decree). It is not as if the attorney is itching to get rid of you, it is just that they have completed their scope of services with you until new services are needed. However, your work is not yet done. It is just beginning...

One of the reasons why attorneys call us in to meet with their clients for post-divorce wealth management is because we are very experienced in helping people transition from the words on the decree to their new life. When a decree has been finalized, and filed with the court, there typically is a list of action items that follow it.

Our firm helps clients establish what it is they need to get done right away, and what action items and tasks need to be completed in order for them to start moving on. We really focus on helping our clients transition from that very confusing time to a more stable time. That involves a lot of work, not just in the area of the portfolio, but in the areas of cash management, new tax situation, re-doing wills and estates and reassessing liability policies.

A simple example is the need to change beneficiaries on a life insurance policy, or changing beneficiaries on individual retirement accounts. Another is changing allocations of portfolios because there are no longer two risk profiles that need to be considered, or redoing their retirement planning based on one person’s needs instead of two.

The wealth management practice really is not just about reestablishing your asset allocation, but it’s about analyzing your current living situation in light of your new life and the needs that match your new life.

Typically, when someone gets divorced, they don’t know what to do next. I just advised on a case where we did not negotiate the divorce, but the wife was referred to us a couple years after her divorce was finalized. She still had not executed the Qualified Relations Domestic Order attached to her decree.

For two years, her money has been sitting in her ex-spouse’s 401K, waiting to be transferred to an IRA in her name. She hasn’t had access to these funds so that she can make investment decisions based on her needs and suitability. It was confusing, and sometimes when we are confused, we are paralyzed out of action; she needed guidance on how to move forward. Our firm clarifies that and sets out a path and course of action to help people transition, and not feel paralyzed by how to approach it.

Are you feeling like you are in that post-divorce limbo of not knowing what to do? If so, please feel free to give us a call or leave a comment in the box below. We would be happy to answer any questions you have.

Jennifer Failla, CDFA™
Principal, Strada Wealth Management
Toll Free: 866.526.7098
Email: info@stradamanagement.com