Whether relieved, exuberant, sad, overwhelmed or just simply happy it’s over, post-divorce living holds more than its share of varied, conflicting emotions.
From a financial preparation point of view, there are likely to be many decisions that need to be made. Some these things are critical to your financial security and should not be put off or deferred very long.
Things to Do Right Away
- Check and Change the beneficiaries on all insurance policies (including annuities)
- Check and Change the beneficiaries on IRAs, 401Ks, 403Bs, bank accounts and investment accounts.
Many of the beneficiary designations for these types of accounts are not governed by the terms of a will. That means that regardless what your Will says, assets in these types of accounts will pass outside of the Will to the person/s that have been designated as beneficiary.
It is imperative to review and change the beneficiaries on your account. Practice wisdom is rife with stories of ex-spouses who have been the beneficiaries of their former spouse’s life insurance policies. This lack of attention to detail will cost your beneficiaries ‘big time’. Too, there is often -little, zero, no- legal recourse for recovering these assets.
3. Meet with an Estate Attorney to Write or Revise your Will*
This step is especially true if you have:
- Minor children
Parents should never leave potential need for the guardianship of their minor children up to the courts, period.
When it comes to assets many of us fall into the trap of thinking that we don’t really have that much. If you have a house with some equity in it, retirement savings accounts or investment accounts, it is important to seek out an Estate Attorney to help access your situation and to draw up a Will.
Due to cost, many people want to forego using an Attorney in favor of the ‘do it yourself write a will’ applications found on line. I do not recommend using an app for drawing up such an important legal document as a Will.
*When working with your Estate Attorney, don’t forget the Health Care Directive, Living Will and considering Durable Powers of Attorney
- Assess your Overall Financial Situation
Although this is probably the last thing you want to do after a divorce because of fear of ‘the worst’, being overwhelmed or limited money management experience, knowing where you are financially is super important.
Again, laying a financial foundation for you and for minor children is a critical post-divorce activity. Here are a some of the items that you will want to assess:
- Health Insurance Coverage
- Life Insurance Coverage
- Home, auto and liability insurance coverages
- Emergency Fund
- Outstanding debt
Don’t get stuck. There are plenty of online tools to help you budget. And, for helping you assess your insurance coverages, emergency fund, debt pay off, etc., interview several, then hire a Financial Planner who charges by the hour.
- Go Forward Slowly before Investing Lump Sum Monetary Settlements
If you are grieving and picking up the emotional pieces after a divorce, go slowly before making any large investments. After considering your overall financial position, your dreams and your immediate financial goals, take the time you need to fully consider all of your investment options before investing.
The Financial Planner that helps with your overall financial plan will be able to offer some investment ideas that match your needs and suit your investing personality.