Dependent Children and Tax Benefits
Just when you think the agony of a divorce is over, there is another list of financial matters to take care of. Start by making a lot of copies of your divorce decree because they will be needed to show you are really divorced and the changes you are making are appropriate.
The key information you may need to change, in many places which we will get to, are name, address, email, phone number and marital status (where appropriate). Overall, you will want to list all people and organizations with whom you interact and start working through it, from employer to magazine subscriptions.
- Basic identifications: Better if you get this done first so subsequent changes will go more smoothly. This includes driver's license, vehicle registrations, voter registration, Social Security, military (records, reserves and benefits), Medicare, Passport and any Foreign Citizenship.
- Child related: school records, day care, organizations and activities they participate in, emergency contacts, designate new alternate guardians, their insurances and/or accounts. Also consider software like Family Wizard for coordinating co-parenting arrangements and facilitating clear communication among all parties.
Those "other children" also known as pets: veterinarian, day care, kennel, and emergency contacts.
- Banking and investments: Review all accounts and complete transfers as per your divorce decree. Be sure all personal information is up to date and confirm it after the fact. Don't forget the safe deposit box. Change all online passwords to these accounts. You will need to develop new favorite protocols that cannot be guessed by someone who knew you well.
- Real estate: If you retained any jointly owned real estate you will need to resolve the ownership status with a quit claim deed. Then, separate and apart from that, any mortgages will need t be refinanced in your name only. You do not want to remain linked financially in any way to your former spouse. Unfortunately, the refinance is an often overlooked item and the existing mortgage can continue to bind you to your ex-spouse financially. Not a good thing.
- Utilities: Be sure everything is in your own name. It may cost you some in new security deposits and lost cell phone family plans, but so be it. This is just another unavoidable cost of this divorce. You really do not want providers writing and calling your ex-spouse to conduct business, or requiring their signature at some point. Now is the time to head that off and present yourself as a single person and totally responsible for your finances.
- Beneficiaries: Update your beneficiaries identified on life insurance, annuities and all retirement plans and IRAs. Sometimes attorneys and judges try to be helpful and include a statement in your decree to the effect that these changes are made in that document, or that at least the existing identification of your former spouse is rescinded. Unfortunately, there are laws at the federal level that say insurance providers and custodians of retirement funds must honor the beneficiaries identified in their documentation, which you previously signed. With all due respect, your decree issued in a state jurisdiction cannot override the federal jurisdiction. You must change each and every beneficiary. To not do so may result in your ex-spouse inheriting your money. Even if you have a new will prepared, which you will do, these items having specifically named beneficiaries, are not covered by contrary terms in your will.
- Credit cards and debts: This is a tough one. The only way to really sever any joint responsibility on credit cards or other debt is to pay it off and close the account. You need to remember that the card issuer or lender had a contract with both you and your spouse. Just because you get divorced, does not change that. They still will hold both of you responsible for repayment regardless of whatever agreement you may subsequently have between you, like a divorce decree assigning the debt to one or the other of you. You are simply both on the hook until it is paid off. The best thing to do is close all joint credit cards and start over with individually issued ones of your own.
- Employer and Professional Contacts: This can be multi-faceted. Telling one person in Human Resources is not enough. The may make one change in one place and simply not cover everything; then it will come back to bite you. Follow-through and be sure any necessary changes are made on your employer-provided retirement plan, life insurances, phone plan, vehicle, credit card, health insurances, Health Savings Account, and complete a new W-4. Change your direct deposit to your new individual bank account.
If you belong to professional groups, change your contact information as appropriate with each one. If you deal with persons and organizations outside of your employer for any reason and they need to know your new name perhaps, or how to contact you directly, try to create an effective, memorable, but professional message that you can easily broadcast to them and reissue as necessary as a reminder.
- General Access: Examine all the ways people access you or you access them and change it. This includes all website IDs and passwords, ATM codes, all locks and security codes. And after you change the locks on the house, or even if you are at a new home, come up with a new idea of where to hide the spare key.
- Everything Else: As thorough as you try to be, there will always be more to do. Seldom seen friends, the annual Holiday card senders, community groups, charities, merchant discounts, shopping clubs, subscriptions, even the junk mail you actually like to receive. One by one, take a moment to correct any obsolete information they are using to identify and/or contact you. Soon it will stop happening.
As tedious as this all seems, it is actually a bit of a refreshing exercise. Instead of being dragged down in spirit by continued mistaken contacts and reminders of what no longer is, your will become buoyed by the autonomy and independence that comes with your new proper identification. Your immediate response will become, "Yes, that's me!" instead of "No, he/she isn't here anymore."
Put your divorce in the rear view mirror in every respect and move on as a fully sel-sufficient individual. Wishing you all the best.
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