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It sounds strange, but honestly, it’s a lot of work to get a divorce. I speak from experience, having been married almost 20 years, and divorced for 14 years. I still recall how exhausting the process was, and yet there was still much to do after everything was finalized. Don’t forget these critically important steps following a divorce to secure your financial future.

Create a New Financial Plan

It’s important to make the transition to thinking like an individual, and not part of a couple when you create a new financial plan. Think of creating a solid financial plan as a fresh start, and the process as empowering. With the new plan in place, you will have clarity about your financial future and the increased peace of mind that goes with it.

The Marital Settlement Agreement may have specified which party gets which assets, but it will be your job to retitle or transfer those assets to your control. You’ll need to consider each asset, how it should be titled and if appropriate, who should be listed as beneficiaries. This is the first step in creating a new financial plan for yourself as an individual.

Transfer Your Assets

Brokerage Account

You may need to handle specific assets in different ways. For example, if you are dividing an investment brokerage account, you will need to set up your own account first and then transfer your share of the assets into the new account. Obviously, you will need to decide whether to keep those assets, how to invest them and consider the tax consequences of selling them.

Real Estate

If you receive real estate in the settlement, you will want to make sure the home is titled in your name, with transfer on death designation or the name of your trust.

Life Insurance, Annuities or IRAs

If you have life insurance, annuities, or IRAs, you will want to reevaluate the designated beneficiaries. These are just some examples, among many. It’s important to be thoughtful in considering your resources and how they fit into your overall plan.

Determine Your Cash Flow and Income Taxes

After assessing your assets, you will want to consider your cash flow. This is a significant source of anxiety for most people. Are your assets income producing or do you need to consider downsizing and selling the family house? What are your forms of support? In addition to maintenance, child support, Social Security, pensions, and annuities, how much do you need to draw from your investment portfolio to support your current lifestyle? Once the best sources of cash flow are identified, consider how your income taxes may change. Your filing status will likely be single or head of household. As a result, you should reevaluate withholdings and the need to make estimated payments.

Review Your Estate Documents

After considering your assets and cash flow, you’ll need to consider your estate documents. This step is especially crucial if you are a single parent of minor or young adult children. Not only are you protecting your wealth from other people, but you also may be protecting children from their own impulsive spending.

If you create a trust, you can specify how and when your funds can be utilized. For example, trust funds may be used for a down payment on a home or beneficiaries may access one third of the funds at age 30. In your current documents, it’s likely you gave your former spouse important roles as executor, successor trustee, and powers of attorney for healthcare and property. You will want to consider appointing different agents. Most people do not want their former spouses making critical decisions for them including whether to administer life-saving treatments in emergencies. As your children mature, you may want to consider appointing them as agents.

Reevaluate Insurance Needs

In addition to your wealth transfer plan, your insurance needs may have changed as a result of the divorce. Depending on the division of assets, you may need less insurance. In the settlement agreement, perhaps you agreed to obtain and keep a certain amount of life insurance in force. It’s always important to reevaluate your insurance coverage, but especially after a divorce is finalized.

List of Smaller Tasks

In addition to creating a new financial plan for yourself as an individual, there are multiple smaller tasks. For example, it’s important to run your credit reports to ensure that joint accounts were cancelled. Each credit agency is required by law to provide one free report each year. Be sure to change all of your passwords to increase the security of accounts and social media.

These are just a few among many tasks. To help keep your post-divorce to-do list on track, we created a checklist of actions you may want to consider. In the checklist, we outline the legal and financial steps to consider. Download it here.

It’s important to organize and take ownership of your finances following a divorce settlement. You may be assuming new roles as individual investor and protector of your wealth. With the right support, this process can be empowering. Once your new financial plan is in place, take a deep breath and congratulate yourself. Brighter times are ahead!


This is intended for educational purposes only and should not be construed as personalized legal or financial advice. Please consult your legal and financial professional(s) regarding your unique circumstances.

Allison A. Alexander Allison A. Alexander Financial Advisor

Allison has been involved in the financial services industry since 1985. She is a member of the American Institute of Certified Public Accountants, the Illinois Certified Public Accountant Society, and the Institute of Divorce Financial Analysts.

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