Seven Steps to Divorce Your Finances from Your Ex

Don't forget to tie up financial matters after you divorce. Our checklist will help.
Don't forget to tie up financial matters after you divorce. Our checklist will help.

Don’t forget to tie up financial matters after you divorce. Our checklist will help.

by Ginita Wall, Certified Public Accountant (CPA), Certified Divorce Financial Analyst (CDFA), Certified Financial Planner (CFP®)

Even in the best of circumstances, a divorce is a long, arduous, and emotional task. As soon as you finalize the divorce, you might just want to curl up in bed for a few weeks and watch every single thing on Netflix. Not so fast! Now that you and your ex have uncoupled your married lives, it’s time to uncouple your financial ones at well. As you begin to walk your own path, you must ensure that you are now solely in control of your finances, including your bills, insurance policies, and estate planning documents. Pause that Netflix show, you have some financial divorcing to do!

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Ginita Wall

  1. Separate Your Bank Accounts and Open Your Own

If you and your spouse held joint bank accounts, it is time to close those suckers out and open your own accounts. This will allow you to control your own money and will help you both avoid inequities in spending within the shared account.

  1. Re-Route Direct Deposits and Direct Bill Pay

Now that you have your very own checking and/or savings accounts (I recommend both), you need to make sure that your automated deposits and bill pay go to the right place. You are going to be mighty unhappy if your next paycheck tries to go into the joint account you just closed, and your electric company won’t appreciate trying to pull your monthly payment from a non-existent account. Make a list of all the automatic payments that go into and out of your joint accounts and then make sure to re-route the ones you are responsible for.

  1. Deactivate Joint Credit Cards

It might be tempting to put some last-minute charges on a shared credit card, but it is best to resist. Instead, open new credit cards in your own name first and then work with your spouse to close down all your shared cards. You two will need to work together if your shared cards have a balance. Most credit card companies allow you to transfer part or all of a card’s balance to a new account, and many actually offer special promotions with low or zero introductory interest rates on transferred balances. As with your online accounts, make sure you re-route any automatic payments from your old credit cards to your new ones.

  1. Remove Your Ex from Your Insurance Policies

Unless your divorce agreement provides otherwise, it’s time to boot your ex off of your health insurance policy, car insurance policy, and renter’s insurance. Make sure to let him or her know what you are doing so he isn’t surprised to learn he doesn’t have insurance after a car accident. If you are on your ex-spouse’s insurance policies, don’t bet on him paying your premiums unless that was part of your settlement. Time to start shopping for your own insurance policies. (Learn about how to Maintain Your Health Insurance After Divorce).

  1. Make Sure Your Ex Isn’t Your Beneficiary

During the good days of your marriage, you probably made your ex-spouse the beneficiary of your life insurance policy, your retirement accounts, the trust that holds your inheritance, and perhaps your entire personal estate. Unless you two somehow managed to stay best friends, chances are you don’t want him to benefit financially from your demise. Schedule some time in the near future to remove him as your beneficiary from these documents. (Learn more about Estate Planning for Women).

  1. Remove Your Ex From the Title of Your Assets

Is your spouse listed on your car title or the deed to your house or other property? If you received these items as part of the divorce settlement, you’ll want to make sure that yours is the only name on those important documents. Transfer your vehicle title to your name and record an Interspousal Transfer Deed to remove your spouse from the house deed once all other ownership arrangements have been made (for example, you’ve paid him to buy him out his share of the home).

  1. Create a New Will

One of the most important things you need to do now is make sure that your financial legacy goes to the right people in your life. If your ex-spouse is the prime beneficiary of your will or is listed as your agent in your durable power of attorney, you’ll likely want to update both of these documents. This might mean giving your estate planning attorney a call or filling out new online templates.

Yes, tying up all of these loose ends is a lot of work, but it is also worth the hassle. Financially divorcing your spouse after your official divorce will put you on more solid financial ground and give you a clear path ahead as you begin to rebuild.

The Baby Boomer Divorce and Why Collaborative Divorce Is a Good Choice for the Over 50 Crowd

Al and Tipper Gore's wedding, 1970

by Michele Sacks Lowenstein, Certified Family Law Specialist,
Lowenstein Brown A P.L.C.

Do you know that 25% of people getting divorced today are over 50?

Do you know that getting a divorce late in life presents additional financial consequences?

Do you know that people who divorce late in life are more likely than not to seek alternative to litigation?

Michele Sacks Lowenstein Divorce for those 50 and up has increased from 10% to 25% of all divorces. What’s behind today’s Baby Boomer divorce boom? Some theorize that as we grow older, lose our elderly parents and face retirement and the “empty nest” that these events are catalysts for Baby Boomers to reassess their lives. At age 65, people can be expected to live another 20 – 25 years and are less willing to sacrifice the years they have left to a marriage which no longer meets their needs.

The Baby Boomer divorce presents unique financial consequences. A late in life divorce impacts years of retirement planning. For the more economically secure the late in life divorce, while still disruptive to retirement plans, it can mean a new life with minimal negative consequences. For those less secure, the late in life divorce can result in financial uncertainty or devastation.

Regardless of the couples’ financial circumstances, the over 50 divorce requires people to take stock of their Social Security benefits, health insurance and housing costs. For some, this can mean rejoining the work force after an absence of many years. Attorneys representing older individuals must be able to provide strategic thinking and advice to what repositioning needs to be done with respect to retirement planning.

Collaborative Divorce is an ideal alternative to litigation for the Baby Boomers who have planned for their retirements. They understand that tackling the problems creatively can help them find solutions that will allow them to preserve not only their nest egg, but move on with their lives. This can best be accomplished by working with professionals who are experienced in the division of more complex estates and attuned to the unique problems presented by the late in life divorce.