Chapter 20 After the Divorce: How Do I Get from "we" to "me"?

• Library: Divorce & Money (Nolo) (2020 Ed.)

CHAPTER 20: After the Divorce: How Do I Get From "We" to "Me"?

How Do I Finish the Business of Divorce?

Can I—Or My Ex-Spouse—Change the Settlement?

What Do I Want to Do With My Life?

If You Have Money to Invest

If Money Is Tight

Postdivorce Financial Planning Tips

Setting Goals After Divorce

If You Find a New Love, Protect Your Old Assets ... and Your Alimony

Cohabitation Can Be Costly

Prenuptial Agreements

How Can I Move Beyond the Divorce?

Congratulations ...you've made it. Your divorce is over, and it's probably a tremendous relief. As far as your financial life is concerned, however, the watchword after divorce is caution—not celebration.

Just as it was important to avoid spending sprees during the divorce, it's wise to keep your expenses down once the divorce is final. You need time to adjust to your new life. The last thing you want to do is run up big bills that you can't pay.

Similarly, don't let your guard down while you wrap up the details and get ready for life as a single person—or single parent. First, you must be sure to follow through—or see that your spouse follows through—on the settlement you've worked so hard to secure. Be on the lookout, too, for people who try to pressure you into investing your money one way or another. Sit tight. You'll have plenty of time to decide what to do once you've made sure there are no loose ends from your divorce that could trip you up in the future.

How Do I Finish the Business of Divorce?

Forgetting to follow through on details after divorce is one of the easiest things in the world to do. It's also one of the costliest.

During the divorce, you were under tremendous stress. Now, you may be more exhausted than you realize, and that can lead you to overlook important tasks. Even if you're feeling exhilarated instead of exhausted, that state of excitement can lead to overconfidence and a lack of focus on the business at hand.

You could literally lose the property you fought to keep because of simple errors in divorce paperwork. One man lost his vacation home to his ex-wife when she sold it before the deed transferring ownership to him was recorded. Another woman had to pay off debts her ex-husband incurred because she forgot to close a joint account.

Even after the judgment is entered, you must take steps to implement the provisions of the divorce decree and make sure your newly single status is reflected in your financial and legal dealings. Not all items on the following checklist will apply to everyone, but read it all carefully and attend to all the ones that do apply to you.

Checklist: Required Postdivorce Actions

Name change

___ See that your name is removed from any debts or loans that are no longer your responsibility.

___ Contact the Social Security Administration by filing Form SS-5 at a local office or downloading the form from the agency's website, www.ssa.gov. It usually takes two weeks to verify the change. (A mismatch between a name on a tax return and a Social Security number could increase a tax bill or reduce the size of a refund.)

___ Tell your employer, including the human resources department and retirement plan administrator or custodian.

___ Notify all your creditors.

___ Apply for credit in your new name.

___ Change the name on your bank accounts and checks, or open new accounts in your new name.

___ Apply for a name change on your passport; the application is available online at www.travel.state.gov/content/travel/en/passports/apply-renew-passport/change-correct.html.

___ Notify medical care providers, insurers, the registrar of voters, utilities, the post office, and the state department of motor vehicles.

A Rose by Any Other Name ...

You may feel by now that you've gone through enough changes in your divorce. But there is one item that you may not mind changing: your name. Changing your name as part of the divorce process can be more efficient—and less expensive—than waiting to do it later, when you will probably have to pay court fees. You can use your birth name, use a name from a prior marriage, or, in some cases, simply make up a new name altogether. If you're in California, you can consult How to Change Your Name in California, by Lisa Sedano and Emily Doskow (Nolo).

Real estate and cars

Divide the property as set forth in the divorce decree. Specifically:

___ Execute a quitclaim deed to transfer title to real estate, as required by the decree. New deeds must be recorded at the county recorder's office. Contact your tax assessor's office for forms to sign to keep property taxes from increasing because of the transfer.

___ Fill out new registration forms changing title to cars, boats, motor homes, or other vehicles and file with the state department of motor vehicles. (Failure to do so could result in trouble or expense for you if the vehicle no longer belonging to you is later involved in a mishap or receives a citation.)

___ Notify your auto insurer of any changes in automobile drivers, ownership, and addresses. (Also, if needed, apply for a new driver's license with your new name and address.)

___ Remove your former spouse's name from your mortgage or lease.

Insurance

Review your health, dental, vision, life, and disability policies. Be certain you and your children have adequate coverage. In addition:

___ Make sure the beneficiaries named in your policies are who you want them to be and are consistent with the divorce decree.

___ Execute all necessary COBRA documents to ensure continued health insurance coverage, and make sure that your ex-spouse has done the same.

Estate planning

During your marriage you may have drafted a will, created a trust, or taken other steps to determine who will receive your property after you die. Review those and change them to reflect your new status. Also, create a new power of attorney for health care, naming the person you want to make medical decisions if you become incapacitated.

Debts

Verify that all joint accounts are closed and that you have paid or have a plan to pay all debts you agreed to cover. At the same time, contact the creditors your ex-spouse agreed to pay and make sure they're receiving payments. (If they aren't, you may wish to minimize damage to your own credit by paying those bills and then seek reimbursement from your ex-spouse.)

Deposit accounts

Check your deposit accounts—checking, savings, money markets, certificates of deposit, and Treasury bills—to make sure the names on, and the amounts in, the accounts are consistent with the decisions reached in your settlement.

Changing Joint Deposit Accounts

To change joint deposit accounts, write to the financial institution where you have your account. Here's some sample language to use:

"Please be advised that as of [date], account number __________, in the names of __________, is to be closed. All assets from that account are to be transferred into a new account in the name of __________"

You and your ex-spouse must sign this form. Some banks and brokerage firms may ask for a copy of your divorce decree, but do not send it unless you're specifically requested to do so.

Investment accounts

Check investment accounts to see that ownership of stocks, bonds, and mutual funds is properly listed.

Children

If you share custody of children, you should have access to their school reports, medical records, and other information. Also, make sure you understand your custody and child support agreements and that you fulfill your obligations. Specifically:

___ Pay all support when due. Keep detailed records of each payment made or received.

___ Keep your scheduled visitation times with your children.

___ If you change jobs, notify your former spouse and your new employer. (Do what's right, even if a judgment or order doesn't require it.)

Tips for Completing the Business of Divorce

Here are a few tips for wrapping up the loose ends:

• Review settlement details. A few days after your divorce is final—after you've recovered from the euphoria or the exhaustion—meet with your lawyer or financial advisers to go over the details of your settlement. Make lists of the items that you, your attorney, your ex-spouse, or others are responsible for completing. Don't leave these items to memory. Make sure the Qualified Domestic Relations Order (QDRO) is entered and implemented, if required by the divorce decree.
• Keep records of all payments you make or receive—for alimony, child support, or property exchange. Make copies

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