You’re divorced! Now what?

Posted by: Teresa Reade

After the emotional, and often expense, experience of going through a divorce, the Judge's gavel has dropped and the marriage is over. Now what happens?

First, make sure you actually divorced. There are many procedural and internal matters that must occur before a divorce is complete and finalized. The court has to approve your settlement agreement, or issue a judgment if your divorce went to trial. Either way, the court must actually enter the judgment, which is the document that finalizes your divorce. Also, there may be a waiting period before the divorce is final. Make sure you have a copy of the settlement agreement and/or judgment, and keep the documents in a safe place.

Second, make sure you understand the terms of your divorce. Whether you have a settlement agreement or a judgment, this document sets out exactly what your rights and obligations are to your ex-spouse. Do you need to divide assets? Do you have time limits? Do you have to pay debts? You should take some time to read and re-read this document and ask any questions about what is in the document. This will be the road map that tells you when and how you start your new life. Make a list of all the things you are required to do and all the things your ex-spouse is required to do, and make sure those items are completed. Discuss each one with your attorney to ensure they are not only completed, but completed correctly.

Once you understand the terms of your divorce, here are some additional steps to take:

  • Notify your employer and complete a new W-4 showing your new number of exemptions;
  • If you changed your name, ensure that it is reflected in your state issued ID, notify your employer, notify all financial accounts (banks and creditors), notify any insurance companies, and any clubs or organizations you are part of;
  • If you moved, complete a change of address form with the USPS, IRS, employer, financial institutions, insurance companies, friends and families, and any clubs or organizations you are part of;
  • Maintain files for each of your necessary tasks and changes. For example, prepare a folder relating to the transfer of the house; the division of retirement; the life insurance; the health insurance; the children's expenses for activities and medical costs; communications with your ex-spouse; etc.
  • If your attorney, or your ex-spouse's attorney, is responsible for dividing the retirement account(s) ensure that the task is completed. Obtain a copy of the Order signed by the court, usually called a Qualified Domestic Relations Order (QDRO), and follow up with the plan administrator to make sure they received the Order and actually divided the asset.
  • If support is being paid or received, keep records! Never pay cash or receive cash payments. Keep copies of any checks as proof of payment in the event an issue arises. This should be done not only for child or spousal support, but for all expenses including activities, medical payments, insurance payments, educational costs and college costs.
  • Ensure that you know which parent is allowed to claim the child(ren) as a dependency on their tax returns. The rules as stated in the judgment are often different and override the rules of the IRS. It is not uncommon that tax preparer does not understand the effects of a divorce on the dependency exemption, so you should rely on advice of counsel over the advice of your tax preparer.
  • Ensure that all joint accounts are closed. This not only includes bank accounts, but also credit cards, safe deposit boxes, utilities, memberships and social media.
  • If you have not done so already, ensure that all of your passwords are changed to something that cannot be guessed by your ex-spouse.
  • Change your will, advanced directives and power of attorneys. Also, if you are allowed to, change the beneficiary on any retirement account and life insurance. Again, seek advice from your counsel to ensure you comply with your judgment.
  • If you suffer a change in your financial situation, such as loosing your job, seek a modification immediately. The court cannot modify a support order any earlier then the date the complaint was filed and served. It is your responsibility to obtain a change in any orders as the amount you owe will continue to increase until the order is changed. If you are paying through the Department of Revenue, they can take enforcement action, by placing a lien on all bank accounts (even joint accounts with others) ,and suspending your driving and professional licenses until the back support is paid.

Finally, you should begin planning for your new future. Your financial structure has changed dramatically now that you are divorced. You may have a cash payout from assets or real estate that needs to be properly invested; may have retirement accounts that should be rolled over; may have future pension benefits that need to be taken into account; you may be entitled to social security benefits for yourself and/or your former spouse; or this may be the first time that you are responsible for household finances. In any of these circumstances, you should meet with a financial planner to review your income, assets, and liabilities and to put into place a plan for your future.

Divorce brings many changes and financial challenges to the new family. Taking the time to organize documents and discuss these changes with professionals will provide you with a roadmap to get through the transition, and build a solid financial foundation for the future.