9 Financial Tasks to Take Care of After Your Divorce

9 Financial Tasks to Take Care of After Your Divorce
Last Updated on March 9, 2023 by Carlos Lopez

Your divorce brings about all sorts of life changes: You are suddenly single, you’re spending less time with your kids, and you may have had to get a whole new place to live.

Divorce is an incredibly uncertain, tumultuous time.

It can also be a financially taxing time.

Protect yourself from the avoidable financial fallout of your divorce by taking some time to plan carefully and make necessary changes to your finances after your divorce. Here are the 9 most crucial tasks to tackle:

Cancel or Suspend Joint Accounts

If you were married for any length of time, chances are good that you had at least some sort of joint accounts. Bank accounts, credit cards, club memberships, or automatic subscriptions all will need to be canceled or suspended.

Start with the accounts that could have the most financial impact on you – credit cards and bank accounts.

Open New Accounts

Once you’ve closed your old accounts, you need to open new ones in your own name. This is especially true if you plan to look for a new place or get a new car anytime in the near future.

Open new bank accounts and apply for new credit cards to help yourself build up credit separate from your former spouse.

Change Beneficiaries

If you have a 401K, life insurance, or another investment account, you need to make changing beneficiaries a priority.

Think about it this way: If something unfortunate happens to you before you get the chance to change beneficiaries, your retirement accounts and life insurance benefits go to your former spouse instead of to your children or another family member who would better carry out your wishes.

This task doesn’t take very long, but it’s one that many people put off for too long or forget about entirely.

Update your Insurance Policies

Change your name (if necessary) and contact information, and remove your ex’s information off the policy.

If you listed assets on your homeowner’s insurance, double-check that you still retained all that property – including jewelry, artwork, or collectibles – following your divorce.

Check Your Credit Score

If you and your ex lived apart for a while, there’s a good chance that property could have been bought or loans taken out without your knowing. Make sure that these haven’t negatively impacted your credit score, and work with a financial counselor if you have some repair work to do.

You can get one free credit report per year from each of the three major reporting agencies – Equifax, Experian, and TransUnion – so put these free reports to good use.

Retitle Assets

Your home, car, or other assets may have been titled in both your and your spouse’s name during your marriage.

Now that you’ve divided up those assets, you need to get titles for the property you kept issued in your name only. This prevents you from having to be involved with your ex if you want to sell the property in question, which can cause more headaches than you need.

Run New Tax Projections

Given your newly single state, your tax liabilities and withholdings likely have changed. You can take fewer exemptions, for example, and you may not be able to claim your children as dependents on your tax returns.

Work with an accountant to run new tax projections so you take the correct number of exemptions and avoid taking too many and then owing money at the end of the year.

Update Your Estate Plan

Like beneficiaries on financial assets, updating estate plans often gets forgotten in the long list of tasks that come with a divorce.

Visit an estate planning lawyer and update your will, trust, powers of attorney, and other estate planning documents to reflect your new life situation.

Shore up Your Finances

Now that you’re single, you’re far more vulnerable to the ebb and flow of your financial situation than you were when you were married.

A job loss, expensive repairs on your home, or an illness can quickly drain any savings you may be able to build up. To minimize the toll these situations may take on your finances, consider creating a financial safety net for yourself.

Set up an emergency savings account and aim to save, over time, several months’ worth of living expenses. You also may want to consider taking out a disability or critical illness insurance policy on yourself to help pay bills in the event you get ill or injured.

Experienced Divorce Attorney in Washington, D.C.

Your divorce can leave you feeling uncertain of the future and rushing to put your life together. You need an attorney who can guide you through the process, helping you figure out a way to move forward. At Lopez Law Firm, our team helps you from the moment you decide to get a divorce all the way through any post-judgement modifications. Schedule your consultation today!

Comments

  1. Aila says:

    Comment:

    Hey guys, so the article mentioned canceling or suspending joint accounts after divorce. But what if we just keep them and confuse everyone? #financialanarchy

    • Vanessa English says:

      Well, if you enjoy playing mind games and causing unnecessary chaos, go ahead. But for most people, canceling joint accounts after divorce is about moving on and untangling finances. Its not about stirring up more trouble. #commonsense #financialstability

  2. Axel Reynolds says:

    OMG, who knew divorce could be so complicated? Canceling joint accounts sounds like a nightmare!

    • Iliana Jackson says:

      Divorce can indeed be a complicated mess. But hey, dont fret! Canceling joint accounts can be a breeze if you handle it with maturity and common sense. No need to exaggerate the nightmare, just deal with it like a responsible adult.

  3. Cruz says:

    Comment: Who needs joint accounts anyway? Lets all just stash our cash under our mattresses!

    • Kashton says:

      While it may be tempting to hoard cash under the mattress, joint accounts offer convenience, transparency, and shared financial goals. Plus, theres no risk of it being eaten by moths or accidentally thrown away. But hey, to each their own, right?

  4. Miley says:

    Comment 1: Who knew divorce could be a financial opportunity for a fresh start?

    Comment 2: Canceling joint accounts sounds liberating, but what about the sentimental value?

    Comment 3: Updating insurance policies? Id rather treat myself to a spa day!

    Comment 4: New accounts, new identity – divorce as a chance to become a secret agent!

    Comment 5: Changing beneficiaries – the ultimate power move, or just necessary paperwork?

    Comment 6: Divorce: the perfect excuse to splurge on a shopping spree for new accounts!

    Comment 7: Insurance policies are important, but can we talk about the real issue here – who gets the dog?

    Comment 8: Post-divorce financial tasks: the ultimate way to prove youve got your life together!

    Comment 9: Joint accounts canceled? Time to celebrate with a well-deserved vacation!

    Comment 10: Divorce: the ultimate motivation to finally update your insurance policies, or just a hassle?

  5. Jeremiah says:

    Who needs joint accounts anyway? Lets just throw our money in a pit and hope for the best!

  6. Kaia says:

    Wow, who knew getting a divorce could be so financially complicated? #LifeLessons

Comments are closed.