Regardless of whether your divorce was a welcomed relief or a sad moment in your life, finalizing the divorce doesn’t really mean you’re done. There are certain steps that you must take to ensure the financial and legal aspects of your life reflect your new status. It’s important to update your life planning and contingency plans following a divorce to avoid any unnecessary issues or extra steps if something were to happen to you or your ex-spouse.
The easiest and simplest change to make is to update all account passwords. This includes your email, social media, and financial account passwords. “When you choose a new password, make sure it has nothing to do with your life together,” warns Money Crashers. Do not use any family names, birthdays, pet names, etc.
If you change your name after the divorce, you’ll need to alert the social security office and all creditors. You’ll also need to update your bank account and driver’s license to reflect the change. The same institutions should be notified if your address changes during or after the divorce. Also, notify your auto insurers of any changes in automobile drivers, ownership, and addresses.
You should also remove your spouse’s name from credit cards and apply for credit in your own name. Open a new bank account in solely your name and make sure that your name has been removed from any debts or loans that are no longer your responsibility.
Taking Care of the Home
Although the divorce decree may name one spouse as the rightful recipient of the home, it doesn’t legally make it that individual’s property. The decree simply gives the individual the right to own it, but the title must be transferred into the individual’s name. The most common way to transfer the title is with a quitclaim deed, which will effectively transfer one spouse’s ownership interest in the property to the other spouse.
A quitclaim deed doesn’t guarantee that an interest in the property actually exists, so it’s ideal for situations in which one family member is transferring the property to another family member and in divorce situations. This is because the receiving individual likely knows the person deeding the title has an interest to transfer.
If you’re the party giving up interest in the property, do not sign a quitclaim deed until your name is removed from the joint mortgage. Otherwise, you’ll still have a legal obligation to make the mortgage payments. It’s best to sign the quitclaim deed at the same time the receiving spouse refinances the property and takes a new mortgage in his or her sole name. If you’re the receiving party and decide to sell your home, make sure to get an estimate on how much your home is worth. You’ll also need to change the titles to your vehicles to reflect any changes in ownership.
Beneficiaries and Your Will
Once you’re divorced, you should update any account that lists your spouse as a beneficiary. This can include your investment accounts, retirement accounts, insurance policies, bank accounts, and your will. Procedures to change beneficiaries vary by account type and state law.
If you don’t update your will, including renaming your power of attorney, your ex-spouse could be considered your next-of-kin, meaning he or she could decide if and when to pull the plug. Your ex-spouse could also inherit your retirement savings, 401(k), valuables, personal effects, and life insurance. Updating your will during your divorce means your ex-spouse won’t be inheriting your assets; you’ll have a trustworthy person as your power of attorney and/or executor, and things will be easier for your heirs.
Invest in Your Future
Investing in your education is a great way to set yourself (and your family) up for continued success. Additionally, going back to school to earn the degree you’ve always wanted to earn will set a powerful example for your children. Consider sharpening your business skills to help you advance in your own career, or even branch out on your own. By enrolling in an MBA program, you can develop your knowledge of business, strategy, and management, and can learn about leadership, self-awareness, and self-assessment.
When making changes to your property titles, beneficiaries, wills, credit cards, and anything else major, it’s always best to speak to the appropriate professionals, whether it’s a creditor, an attorney, or a financial planner. You just want to be sure you have all of your ducks in a row so that the wrong person doesn’t benefit from your death or have a say in your death. You also don’t want to be harmed financially by any decisions that your ex-spouse makes. Take the necessary and final steps to really make your separation and divorce are final.
Having trouble collection child support? Child Support Specialists can help with this common post-divorce problem. Call us at (800) 380-5437.