Women’s Series: Life After Divorce
Statistics show that 41% of all first marriages end in divorce and the majority of those divorces are initiated by women. I also found out at a recent Wells Fargo Advisors conference in the John Hancock session that currently the highest divorce rate is occurring over the age of 50 and those divorces are also driven by women. So, what are the important steps to take during the divorce process and after the divorce?
We are very fortunate to live in a community where we have several great law firms that have attorneys that specialize in Family Law including Smith, Gilliam, Williams & Miles, Whelchel, Dunlap, Jarrard & Walker and Stewart, Melvin & Frost. I had the pleasure to co-write this newsletter with Julia Greene; a family attorney who works with Lydia Sartain at Stewart, Melvin & Frost. Julia and Lydia have helped a tremendous number of men and women in our community with life during and after divorce. When Julia meets with a prospective divorcee client she has a list of potential action items she reviews with them. See the list below; if you are going through a divorce or living with a divorce you may want to consider the following:
- Bank accounts & brokerage accounts:
- After the divorce is final close all joint accounts
- Set up your own bank accounts and brokerage accounts
- Update any auto-drafts or auto-deposits in your new account.
- Start your own financial plan:
- Work on a new budget for your household
- Work on a savings plan
- Think about your new financial goals:
- Estate planning documents & beneficiary designations:
- Once the divorce is final generate a new Will, Living Will and Power of Attorney documents
- After the divorce, update the beneficiary designations on your retirement plan, your IRA accounts, trust accounts, transfer on death (TOD) accounts and life insurance policies.
- Living situation:
- During the divorce process start thinking about your living situation; will you keep the marital home? Will you be selling it? If so, how will the equity of the home be split between you and your ex-spouse?
- Also, think about where you are going to live and if you are going to rent or purchase
- The next full year you are officially divorced you will need to do your own taxes as filing single
- If you have children be sure to discuss who will be taking the child credit.
- Also discuss how the refund will be split during the year you are getting divorced
- If you are the health insurance carrier take off your ex-spouse after the divorce if finalized
- If you are not the insurance carrier purchase health insurance on your own
- Review and evaluate your homeowners, auto and jewelry policy to be sure all insurance is in your name and only your assets are covered.
- Alimony & child support payments
- Be sure to track and record all of the payments you to receive from alimony and/or child support
- If your ex-spouse starts being late or not following the rules detailed in your divorce decree it is easier to file for contempt if you are tracking your alimony and child support payments
- If you do not have any credit established start establishing credit during the divorce process
- An option could be to open a credit card and pay it off every month.
- Name change:
- If you want to change your name back to your maiden name remember the following – you will need to change your social security card and driver’s license first then start with bank accounts, brokerage accounts and utilities.
- You will need several certified copies of your final judgment decree to provide to each institution to get this done
During my conversation with Julia she and I discussed the issues that really pertain to women going through a divorce. The points above are important for all individuals going through a divorce, but something the both of us have seen is that women tend to have more anxiety with the finances. Often, that anxiety is a result of not being directly involved with or understanding how and where all the financial assets reside. That includes the different issues pertaining to bank accounts, brokerage accounts, financial planning issues, establishing credit and the insurance review. And that is why our group helps our client families complete the Family Wealth Planning document which identifies and categorizes all of our family client’s financial and advisory contacts. This is where the both of us can help women going through a divorce.
Going through a divorce is not an easy process and having the right professionals in your corner is vital to making sure your financial life after divorce is successful.
The next women’s newsletter will be about: estate planning with blended families.
CERTIFIED FINANCIAL PLANNER™
Attorney at Law
Stewart, Melvin & Frost
Raymond James is not affiliated with Julia Greene or any of the attorneys or law firms mentioned in this newsletter. Any opinions are those of Julia Greene and Christina Jones and not necessarily those of Raymond James.
McKinley, Irvin. 32 Shocking Divorce Statistics. Retrieved from https://www.mckinleyirvin.com/Family-Law-Blog/2012/October/32-Shocking-Divorce-Statistics.aspx.