Among the things that are most likely to change during and after a divorce is the financial situation of the parties. Some of the changes to a newly divorced individual’s financial situation will follow “automatically” or, as it is sometimes called, “by operation of law” from the decree of divorce. Such changes are likely to include the form of title to the marital home owned by both parties and the effect of naming the other party as beneficiary in a Last Will.
Notwithstanding such “automatic” changes as may follow from your divorce, it is prudent to be proactive in reviewing and making certain changes to your own financial situation as you approach, go through, and then move on after a divorce. While some or all of these steps may be addressed in the divorce process, there are some that may be overlooked, or if they are addressed, the follow-up action may be deferred to a later date. Most comprehensive divorce settlement agreements will address and resolve the financial aspects of your divorce, but whether your financial affairs are settled by a comprehensive agreement you signed-off on, or by a court order handed down following a contested trial, among others, the following items deserve your attention after your divorce.
If you have a financial advisor, you should work with him or her not only before and during the divorce process, but after it is completed. If you went through the process without a financial advisor, you might want to see one after the divorce, and your divorce attorney can surely recommend one to you. Whether you are working with a financial planner or handling investments on your own, you should review and analyze all of your investments post-divorce. Your “portfolio” and/or even your retirement account(s) are likely to be different than they were during the marriage. If your spouse was handling investments during the marriage, it is even more important to review them carefully and in any event, you will want to consider a possible change in investments or even in investment strategy, based on your new circumstances.
As mentioned above, you should see to the re-titling of any assets that may have been previously titled in both names, as well as those assets whose sole named owner needs to be reversed following the divorce. The house and the car are obvious examples that may fit in here, however, there may be other assets, or perhaps debts/loans, that you need to be sure are properly transferred and/or re-titled.
Likewise, though the designation of your former spouse as beneficiary under your Last Will and Testament may change “automatically” upon your divorce, it is best to make a new Will, naming such beneficiary(ies) as you wish, to be sure that your denotive intent is clear. If you did not have a Will previously, your obtaining a divorce is a good time to create one.
Presumably, you will have closed all joint bank accounts and joint credit cards early-on, but if you have not replaced all such accounts/cards with new ones in your own name, you may want to do so.
You should also check with your insurance broker/agent to be sure you have proper coverage for those assets and risks you want to insure in your new situation, and also to make sure that you are not paying to insure assets and risks that you no longer need to insure, for example some expensive jewelry, firearms, or even premises.
In certain situations, you may want to revise your tax withholding status with your employer(s) following divorce. Your divorce settlement agreement and/or your circumstances post-divorce may make it necessary or prudent for you to change the withholding status to have more or less tax withheld from your payroll check.
Your divorce attorney, your tax account, and your financial planner are all important resources whom you should engage and employ to be sure that your post-divorce financial situation is what you want it to be.
To schedule an appointment with one of our attorneys or for further information, call us at LaMonaca Law , at (610) 892-3877