Navigating divorce? This checklist can help

Start by thinking about what your life will look like during the separation period.

• Where will you and your spouse live during the divorce?
• Do you have income or other financial resources to support you?
• If you have children, how will you spend time with them?

• Talk with family and friends to get a sense of how they could support you.
• Explore resources available in your community and online, such as divorce support groups.
• Look into educational resources that can help you build useful skills where you may have relied on your ex-spouse.
• Consider whether you or your family would like guidance from a divorce therapist or counselor.

Divorces can be expensive – on average, they cost around $15,000 per person.¹ So consider how you’re going to pay for it. Start by looking into readily available funds such as savings accounts or any personal income.

If these aren’t enough, you might need to explore other alternatives. Your financial advisor can help you determine your options and explain their costs and trade-offs.

Until the divorce is finalized and marital property is effectively split, your finances might still be commingled with your spouse’s. This means financial decisions your spouse makes can impact you (and vice versa).

Talk with your divorce attorney about what you can do to establish a more independent financial presence. It’s important that you follow their guidance to avoid any actions that could be perceived as an attempt to hide assets or financially harm your spouse. Your attorney can also advise on how to establish confidential communication channels with your professional team and protect yourself from negative actions your spouse could take.

Build a temporary budget to know how you’ll pay for your living expenses and whether you’ll need to adjust your lifestyle while divorce is ongoing. Also, the more you understand your needs, the better you can advocate for your interests during the divorce.

Discuss with your spouse how joint spending will be divided until the divorce is final. If you have children, these may be challenging conversations, especially if some joint expenses are substantial.

To make more informed decisions during divorce negotiations, you should have a full picture of what you own, what you owe and what could be divided between you and your spouse. Work with your financial advisor to understand the value and key features of your assets and liabilities, such as how easily an asset can be turned into cash, its growth potential and how it’s taxed.

Then, talk to your divorce attorney to understand what will be considered marital property and what could be split during the divorce. Keep in mind that states have different rules about what’s considered marital property. Also, a pre- or postnuptial agreement could supersede state laws.

Retirement benefits accumulated during marriage are generally considered marital property and can be divided during divorce. And while it might be hard to think beyond the present, it’s important that you advocate for your retirement needs during divorce negotiations — once the divorce is final, it can be difficult to ask for a share of your spouse’s retirement benefits. Your financial advisor can help you understand the impact of different retirement benefit proposals.

Social Security benefits

Divorce can affect your ability to claim certain Social Security benefits:

• Spousal benefit — You’re entitled to spousal benefits based on your ex-spouse’s record only if you were married for at least 10 years and remain unmarried.
• Survivor benefit — You must be married for at least 10 years to claim a survivor benefit on your ex-spouse’s record. Remarrying before age 60 — or before age 50 if you’re considered a disabled widow(er) — will cause you to lose eligibility for as long as you remain married.

Discuss the following with your tax professional:

• Which filing status to use (jointly with your spouse or separately).
• If filing separately, who can claim children as dependents.
• If planning to sell assets, whether to sell before or after the divorce is final based on how your tax rates might change.

Consult your divorce attorney about any remaining steps to separate your finances from your ex-spouse’s, such as :

• Closing any joint accounts and credit cards
• Changing your online access credentials so your ex-spouse can’t access your accounts
• Removing your name from bills you aren’t responsible for anymore
• Completing any agreed-upon asset transfers (e.g., splitting retirement assets)

After the divorce is complete, you’ll have a clearer picture of what expenses and support you’ll be responsible for, as well as any support you’ll receive. As a result, you’ll be in a position to build a longer-term budget:

• Add any spousal and/or child support received to your income.
• Adjust your spending to reflect the divorce agreement.
• If you have children, account for smaller expenses not addressed in the divorce agreement. You might want to add a buffer to your budget in case you have to cover them partially or in full.

You might have to review or get new insurance policies, as well as build or adjust your emergency fund. In some cases, your divorce agreement might require you to adopt specific protection strategies (e.g., get life insurance to replace spousal support provided if you were to die unexpectedly).

Keep in mind that you might need to review some components of your protection plan before your divorce is final (e.g., homeowners/renters insurance if you move to a new home during the divorce).

If you relied on your ex-spouse’s health insurance, you’ll likely lose coverage, including any dental or vision coverage. If this is the case, you can explore:

• Getting coverage through your employer (if available) — You’ll usually have 30 days after your divorce is finalized to request a special enrollment period.
• Applying for COBRA to stay on your ex-spouse’s plan(s) — You’ll have 60 days to elect to continue coverage, and you’ll be limited to 36 months.
• Getting health and dental insurance through a marketplace plan — You’ll have 60 days after the divorce is complete to enroll. 

If you’ll be responsible for health insurance for your children but you don’t have employer insurance and can’t afford a marketplace plan or COBRA, explore whether they qualify for Medicaid or the Children’s Health Insurance Program (CHIP).

After a divorce, you might have new financial goals, and goals you already had — such as retirement — might need to be adjusted. Your financial advisor can help you establish your financial goals and determine how to accomplish them.

You also may want to revisit your risk tolerance to ensure it’s still appropriate for you.

Talk with your tax professional about:

• Your new filing status (single or head of household)
• Whether you or your ex-spouse can claim children as dependent (typically, this is stipulated in the divorce agreement)
• The tax treatment of any spousal and child support received or provided
• The tax implications of assets received in the divorce
• Whether you need to adjust the tax withholding on your paycheck

Revising your estate plan with your estate planning attorney can help ensure it reflects your new wishes and prevent unintended consequences, such as your ex-spouse inheriting assets or having a power of attorney. If you have minor children, it’s an opportunity to make sure they are financially cared for.

If desired, you can begin reviewing your estate plan with your attorney before the divorce is final and update the elements that won’t be affected by the divorce agreement, such as your powers of attorney.