The divorce is final and you begin to breathe a sigh of relief. Finally, the red tape is cleared, the documents are complete, and the papers have been filed. You are surely done with the U.S. legal system for the foreseeable future.
Not so fast.
Even after the judgment has been entered, there are a few steps to take in order to effectuate the provisions of the divorce decree and ensure the financial and legal aspects of your life now appropriately reflect your single status.
Let’s look at the top 10 legal documents you should address after divorce.
After a divorce, retirement assets may be shifted between parties. Whether you are giving up funds or receiving them, there are rules that govern asset division in a divorce. Proper handling is critical in ensuring that the right party pays applicable taxes.
The type of retirement plan determines the rules that apply. If the courts and IRA or qualified plan custodians recognize your divisions as incident to divorce, there should be no tax consequences. Pension plans are a little messier and might require you to speak with an attorney.
If you need to transfer part of your retirement balance to your ex-wife, move to get this done quickly after the judgment is final. In doing so you can quickly regain control of the account and continue with your periodic contributions without worrying that the funds will end up in your ex’s pocket.
Upon divorce, it is important to review beneficiary designations on existing life insurance policies and make necessary changes. If there are no children and no financial obligations between each party, it is important to immediately designate a new beneficiary under the policy after a divorce.
In some states, probate laws prohibit a former spouse from receiving life insurance proceeds unless the insured again designates their ex as the beneficiary after the divorce is final. It varies, so if you don’t want your ex-wife to hit paydirt if you get hit by a bus, updating your life insurance policy should be high on your list.
If you do have children, you may want to name them as the beneficiaries. Another option is to consider naming an adult custodian who will be the beneficiary and responsible for distributing the funds to your children on a schedule you deem appropriate.
It is imperative to update your estate plan following a divorce. If you don’t, then at your death your assets could be distributed in ways that you may not want or expect.
By not explicitly stating how your estate is to be distributed after your death, you’re leaving it up to a probate judge. Why burden your loved ones with the stress (and high costs) of probate court when you can easily and explicitly declare your intentions right now?
Start by revoking your old will (or trust) and creating a new one. Sites like LegalZoom walk you through the process of creating estate plans and are very inexpensive compared to hiring a lawyer directly.
Updating tax forms such as your W-4 helps your employer withhold the correct federal income tax from your pay. After your divorce, you will likely want to adjust your number of dependents and change your filing status to ‘Single’.
In my divorce settlement, we agreed to each claim one dependent on our tax returns. Our children were born several years apart, so we rotated which child we’d claim each year. As such, I had to reduce my number of dependents by one.
I made the unfortunate mistake of forgetting to update my tax withholdings late in the year. Not only did I not have enough taken out of my paycheck to cover my taxes for the year, but when I did make the changes I was faced with the realize that my paychecks were going to be $400 lighter each month.
Don’t make the same mistake that I did.
A medical power of attorney document designates an individual who you trust to make healthcare decisions on your behalf should you be unable to make those decisions. Do you really want the woman you just divorced making decisions about your health should you become incapacitated?
A durable power of attorney for health care allows you to appoint an individual, and even a couple backups, who are aware of your wishes and will see them through should the worse happen. Most commonly, power is transferred to another family member such as a parent or sibling.
HIPAA allows individuals to indicate who, besides yourself, may have access to your medical information. These forms are generally completed during new or routine office visits, allowing the doctor’s office to reveal healthcare information to a spouse.
If you no longer want your spouse to have access to your medical records, you will want to make sure to update this at each of your doctor’s offices.
Often during a divorce each spouse has a vehicle, but each vehicle is in both spouse’s names. If each spouse is awarded one vehicle as part of the divorce settlement, courts will routinely require that both spouses remove the other from the vehicle title and loan.
The complexity of transferring a vehicle title depends on a few factors, including whether the title is solely in your ex-spouse’s name or both of your names.You will need to update the title based on the court’s decision, which may be as simple as applying for a new one in only your name. Some states accept a copy of the divorce decree to do so.
Getting your ex-wife’s name removed from your auto loan usually requires that you refinance the loan. If you’re lucky, interest rates have dropped and you might actually save a few bucks.
The reality is that you should have severed joint bank accounts very early in the separation process. I did this in just the nick of time in my own divorce, as another month of shared finances might have meant the mortgage couldn’t be paid.
But if for some strange reason you haven’t done so already, you absolutely need to remove your ex-spouse’s name from all shared bank accounts. If you fail to do so, they may still be able to access funds. Even if both of your names are not on the accounts, ensure that your spouse is not considered an authorized user.
Joint credit cards do not dissolve after divorce. The credit card companies have no interest in your divorce decree. To them you and some woman owe them a debt and have agreed to repay it.
Similar to bank accounts, you’ll need to ensure your wife isn’t an authorized user on any of your current cards. If she is, cancel the card and work out a way to split any outstanding balances. Furthermore, if she still has cards in your name, it’s imperative that these accounts are closed.
But how can you be certain that she doesn’t have any cards in your name?
You may want to request a free credit report to ensure that you are completely aware of all credit cards acquired with your name. You’ll want to leave no stone unturned as you sever your financial ties to an ex, especially one with expensive tastes and little self-control.
When one spouse receives marital property in a divorce decree, it does not automatically mean the house is now theirs. The decree gives the spouse the right to own it, but there are extra steps required to transfer the title into the appropriate name. Find out through your local laws what steps must be taken to make this transfer as smooth as possible.
In some cases, making your changes official will require a certified copy of your divorce decree. Extra copies can be obtained at the county clerk’s office.
While it may seem like a chore to get all of this done, the consequences of neglecting these details can be significant. Right after the divorce, prepare the documents you will need to make these critical changes. Working through these matters may not be easy, but it is essential for you to secure your financial future.
Brad is a divorced father of two who is navigating the brave new world of dating after divorce. A software developer by trade, he experiments with the latest dating applications and tools so that you don’t have to. Brad writes online dating reviews along with other actionable content for men to improve their quality of life after divorce.