Sander Ludeman, AAMS Financial Advisor, Edward Jones 877-385-0305
(The Following Checklist was presented by Edward Jones Investments)
Divorce is a major 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.
Taking 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.
■ 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 benefit 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, marriage license, etc.
Update Medical and Disability Insurances
■ 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 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 renew 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 (QDPRO) to protect your assets.
■ Update financial plans for children’s education expenses (Coverdell Education Savings Accounts or 529 plans.)
Address Tax Considerations
■ Regarding minor children, evaluate who should claim them as dependents if not stipulated in the divorce agreement.
■ Consult your tax professional to help you consider tax implications related to your divorce including tax withholdings, on Form W-4 and the timing of transitioning or selling assets (e.g. home, cars, retirement plans and insurance policies.)
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.
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.