Checklist: Going Through a Divorce

Divorce is a major life change that can bring emotional and financial stress. We understand this may be a difficult time for you. Your financial advisor can be a trusted resource to help walk through many of the financial decisions you may need to make. This checklist can help you consider important financial decisions to address as a result of a divorce.

Take care of the basics

• Make a list of all your assets (including their market value and cost) and debt. This will be useful in dividing jointly owned items. 
• Notify creditors that you will no longer be responsible for your spouse's debts. 
• Determine whether you're entitled to part of your spouse's pension, 401(k) accruals or disability benefits. 
• Make a plan for closing joint bank accounts and paying off credit accounts. 
• Close all joint credit card accounts, and open new accounts in your own name. 
• Review and update your monthly budget. 
• Open or update ownership of a safe-deposit box for storage of important documents. 
• Request personal earnings and benefits statements for both you and your spouse from the Social Security Administration. You also may obtain these at www.ssa.gov.
• Determine whether one of you will maintain ownership of your current residence, and take appropriate next steps. 
• Obtain tax records for property you may receive in the divorce.

Gather and update important documents

• Gather copies of all financial records and tax returns.
• If applicable, change your name on all your accounts and records, and update your Social Security card and driver's license.
• Update authorizations on open credit accounts.
• Obtain extra copies of your divorce/separation agreement.
• Update titles and re-register assets and property in your name alone.
• Obtain and review your credit report.
• Locate important documents such as birth certificates, education records, etc.

Update medical and disability insurance

• Review and update your health insurance if necessary, including removing your spouse from coverage.
• If minor children are involved, evaluate who should provide health coverage, unless stipulated in the divorce agreement.
• Determine if you are entitled to disability benefits.

Review your investments

• Review and update beneficiaries on all accounts.
• Work with your financial advisor to review your investments and retirement plan, and make adjustments as appropriate.
• Ensure you receive the share of your spouse's retirement plan to which you're legally entitled. Consider a qualified domestic relations order (QDRO) to protect your interests.
• Update financial plans for children's education expenses (Coverdell Education Savings Accounts or 529 plans).

Address tax considerations

• Adjust your tax withholding on form W-4 through your employer to reflect your new marital status.
• If you have minor children, evaluate who should claim them as dependents if not stipulated in the divorce agreement.
• If you're contemplating remarriage and you and/or your future spouse are 55 or older, compare the tax consequences of selling either of your homes before versus after you remarry.
• Consult your tax professional to help you consider all tax implications related to your divorce.

Adjust estate plans

• Review life insurance policies to update your beneficiary designations.
• Create or revise these documents immediately following your divorce: will, living will, durable power of attorney, health power of attorney, and trust.
• Meet with an attorney to review provisions for your children in case of your death.

How we can help

We understand this can be a challenging time, and although this checklist is a starting point, your financial advisor is also available to assist you and help ensure your financial best interests remain a priority.