S2E7: Post-Divorce "Mini Bite" Part 1 -Things to Do NOW

The divorce is final; yet the items on your to-do list are overwhelming enough to make you want to crawl under the covers. For most people, the day after the divorce is just the beginning of the transition process, not the end. The key to maintaining sanity during this overwhelming time is breaking up your financial "To-do" list into manageable “bites”. In this, our first 3 part Mini-Bite Series, Jacki and Melissa break down your post-divorce game plan into things that you should do "NOW", "SOON" and "LATER". Each segment has its own mini episode. 

Part One covers things to do within the first 1-3 months after your divorce is final. Jacki gives the listener clear and practical tips  for tackling those tasks that (if handled right away) will save much stress, aggravation and possibly money later.

• To read about how Pearl Planning and Jacki Roessler, CDFA can help you though your divorce or schedule an initial complimentary consult,  CLICK HERE
• If you're already divorced and are looking for post-divorce financial planning from an advisor who specializes in this area, contact Melissa Fradenburg CLICK HERE TO SCHEDULE A CONSULT
• To download Pearl Planning's post-divorce "budget" worksheet, Click here and scroll down to  "Divorce Budget Worksheet"
• To learn more from Jacki about why timing is so important with QDROs, CLICK HERE TO LISTEN NOW 

Links are being provided for information purposes only. We do not suggest that listening to this podcast will make you wealthy. Pearl Planning is not affiliated with and does not endorse the opinions or services of Brian Cohen or his affiliates. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Pearl Planning cannot guarantee that the information herein is accurate, complete, or timely. Pearl Planning makes no warranties with regard to such information or results obtained by its use and disclaims any liability arising out of your use of, or any tax or legal position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation. Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. Pearl Planning financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.

Transcript

Speaker 1: 0:10

Welcome to the Wealthy After Divorce podcast. Jackie Ressler, a divorce financial planner with almost 25 years experience, and myself, melissa Freidenberg, financial advisor with Pearl Planning. We are both certified divorce financial analysts and your co-hosts.

Speaker 2: 0:29

If you're thinking about divorce or in the process of divorce, this is a time for you to take a deep breath and give yourself permission to gain clarity on the financial decision they're facing, while the term wealth typically refers to money and possessions.

Speaker 1: 0:45

We know that truly being wealthy means a whole lot more Together with our guests on this podcast. We will help you live wealthy after divorce.

Speaker 2: 1:02

Hi everyone and welcome back to the Wealthy After Divorce podcast. This is Jackie Ressler and I am so excited to introduce to you our first mini-byte series. This is going to be a series of three separate but related episodes, all on one topic, and this, our first mini-byte series, is going to be a post-divorce game plan. For most of my clients, once the divorce is over, they feel overwhelmed. The truth is, you can go through any task, no matter how overwhelming, if you break it into small, manageable bites, and that's exactly what we're going to be doing. We've separated out the post-divorce game plan into things to do now or immediately Things to do soon are within the first one to six months post-divorce and things to do later, things that you would want to do within the first year after your divorce is final. We're going to get you off to a strong start. Remember, the post-divorce transition process is a marathon, not a sprint. No one steady wins this race, so let's get started. Okay, is everyone ready for part one of our very first mini-byte series? The divorce is final. The items on your to-do list are overwhelming enough to make you want to crawl under the covers, but we've got good news. This part one of our post-divorce game plan is going to give you a checklist of the things that we think are the most important things to do immediately. So immediately means don't crawl under the covers. Come on out and get these small little bites taken care of right now, and it will save you a lot of aggravation in the long run.

Speaker 2: 2:58

The first fight is we want you to go pull out your divorce decree or your settlement agreement In other states, if you're listening, they might call your Marital Settlement Agreement.

Speaker 2: 3:10

You want to pull out that final document and, even though you may have a desire to toss that decree into a drawer, the most important first step is that you do a critical reread of the entire document. I know it probably doesn't sound fun to you, because you've probably seen 25 versions of this over the last month or two as you've been negotiating with your former spouse on the final details, but this is not the time to take your foot off the gas. You want to sit down, get out a cup of coffee or some tea, a highlighter pen or a computer and your final agreement, whichever document that is. You want to take out your highlighter and highlight any section that contains important financial details. Next, create a list that includes all the accounts that will need to change title and or be divided in some way. Also write down any triggering events that might signal future changes. In fact, it's a great idea to add any future triggering event to your electronic calendar now.

Speaker 2: 4:22

For example, suppose you're supposed to receive 25% of your ex spouse's bonus in May of the following year. Now is the perfect time to put a reminder in your calendar for that time period so that next May you'll be reminded that you want to look into that. It could also be something related to child support changing or anything at all that you've highlighted that is triggered by an important life event or date. Finally, you're going to want to create a running list of any follow-up questions for your attorney, your financial advisor, your accountant, estate planning attorney, etc. You want to make sure that you have got a very, very thorough and complete list of all of the things that you want to keep track of. So that is step one. Step two in the do immediately mini-bite is paperwork. You want to get a hold of at least three certified copies of your divorce decree. If you have any assets that are going to be transferred between you and your former spouse, you're probably going to need these May as well. Get them now. You want to also, in terms of paperwork, complete any necessary court or bank account paperwork for recurring account transfers, for example, for child and or spousal support. Also, along the line of paperwork, figure out who is preparing your quadro. A quadro or qualified domestic relations order, which is the formal name, that is the legal document that's going to be prepared to divide up you or your spouse's retirement accounts, whether that's 401k type accounts or pension Pension, remember, is the kind of a retirement account where the employer promises to pay the employee a set dollar amount per month for the rest of their life, no matter how long they live. That is a divisible asset and a divorce, and if you are dividing up your pension or your spouses, you are going to need to have a quadro prepared. Usually in my state it will say who the quadro prepare is going to be, because a lot of times the attorneys will agree in advance, and so that makes it nice and easy for you. You've got their name listed in your judgment. You want to make sure that you take their name, you look it up on the internet and you get the intake forms and start filling them out. A lot of people think that that's going to happen automatically or that the attorney is going to alert the quadro prepare to contact you, which does happen sometimes. But you may as well be proactive and get those intake forms and start filling them out If you have trouble filling them out, of course, reach out to your financial advisor and ask them if they can help you, or your attorney, if you'd like. Obviously, that is something that I do all the time at at Pearl Planning. Part of my job is working with our clients to make sure to make sure that they get their quadro forms filled out correctly and they get that done quickly. That is the key here.

Speaker 2: 7:39

You want to get again. We're talking about the things to do right away, and getting that quadro done is pretty high on that list because it's going to take between three to six months, once the quadro is done, until they're actually put in place and you may get your money. If it's a 401k type account that's being transferred or that will be set and in place Again, this is really critical and important. This is one thing that you want to make sure that you get done soon. Another really important thing that you want to make sure you get done soon is protecting your credit. Remember, your credit is one of the most valuable assets that you take with you after the divorce is done.

Speaker 2: 8:23

In order to protect your credit, you want to take some proactive steps right now. One Go ahead and close any joint credit card, so there's no concerns on your part about additional charges after the divorce. Of course, you want to make sure that that's allowed in your divorce decree and that you are authorized and able to close down joint credit cards, but that's really important. Also, make sure that you remove your former spouse as an authorized user and all of your credit accounts. Last, you want to sign up for a free credit monitoring service like Credit Karma or at Experian. This gives you peace of mind and will also help you confirm that all accounts that were supposed to be closed actually were. If you find out that a joint account that you and your spouse held that was supposed to be closed is still open, credit Karma or Experian can alert you to that or getting a copy of your full credit report and you would want to contact your attorney about that. But that again, protecting your credit is something that you want to get taken care of right away. Usually, after a divorce, most people their credit does take a short term dive, a small dip I shouldn't say a dive or like a dip, but that does happen typically after divorce. However, it should bounce right back up as long as you are proactive in protecting it.

Speaker 2: 9:49

Another item that is often overlooked but is, in my opinion, really important is that payroll deduction checkup. So remember, while you were married, you probably had informed your employer that you were going to be filing married and joint for that year. So there are certain payroll deductions that go along with that election. You want to consult with your tax preparer or your CPA to confirm that your new payroll deductions are still appropriate, or your current payroll deductions. For example, let's say you get divorced in July and that means that you're going to be filing as head of household or single for this tax year, because if you are not married on December 31st of this tax year, you are not going to be able to file married and joint. So your only option at that point is to file as head of household or single.

Speaker 2: 10:45

So one, how do you know which one you're going to be filing at? Well, go back again, pull out that divorce decree that you already have sitting on your desk and look through it and see are you able to claim head of household? And that is going to be related to whether or not you are able to claim one of your child as the custodial parent. According to the IRS, the custodial parent is the parent that has more than 182 overnights with that child and that would allow you to claim head of household status. So looking your divorce decree and see if you're able to claim that. If you are, you want to again check with your CPA to confirm that your payroll deductions are still appropriate. You don't want to be in a position where you are over withholding now or under withholding based on your new tax status. So that's just simply a matter of changing your W for with your employer for the current tax year and again, that is something that you want to do right away. You don't want to wait three months, four months, five months. You certainly don't want to wait until the end of the year and it's too late, maybe to change that. So I would highly recommend that you meet with a CPA for a variety of reasons after the divorce. But really important short term, immediately make sure that you're giving your payroll deduction a checkup.

Speaker 2: 12:09

Last but not least, which is something that I highly recommend again to everybody who's been recently divorced, pull out your post divorce budget. Again, nobody likes the word budget. I hesitate to use it. I like to call it the B word sometimes, because people just do not like the idea of budgets, but remember, a budget is empowering because it allows you the ability to make choices. I want you to take out your budget. If you don't have a worksheet, no problem.

Speaker 2: 12:41

On this, on the show notes for this episode, I am going to be attaching one of my a link for you to download my Divorce Budget Worksheet. You want to make sure that you include all the expenses that you can think of as it relates to your kids' expenses. Again, go back through your agreement. You still have it sitting out but you want to write down what expenses are being split with your former spouse and what is the percentage going to be that you're going to split it in. Also on your budget, don't forget new expenses. So if you're going to be paying Cobra or your own health insurance premiums, you want to make sure you include that. Any child support you have to pay, any spousal support you have to pay, all of that should go on your budget. If you're going to revisit your budget many times in this first year post-divorce, so don't worry about it if you didn't catch everything on there. It should be a living, breathing document for you. Starting on it right away, immediately is going to put you in the right frame of mind post-divorce to take control of your finances.

Speaker 2: 13:50

So that was it for our first Mini Byte, special Part 1, on your post-divorce game plan. Stay tuned for Part 2, when we talk about the things that you are going to want to do soon or within the first one to six months after your divorce. And I am going to be interviewing my co-worker and colleague and co-host, melissa Freidenberg, who works with many of my divorce clients post-divorce, and get her tips for what she would recommend as the most important things, most important bites that are going to be on our second Mini Byte. So we'll see you then. Just a few reminders as I close out this Mini Byte episode One.

Speaker 2: 14:41

We are so grateful to our audience. Our podcast is growing and we would so appreciate it if those of you that have shared continue to share with other people that you think might benefit from this information. Follow us, subscribe and, even if you don't listen to us always on Apple, if you can give us a review. That helps us reach so many more people. So we would greatly appreciate that. If you need any additional help on individual questions that you have on post-divorce game plan issues financial issues. Please find our contact information in the show notes below.

Speaker 1: 15:31

Thank you for listening to the Wealthy After Divorce podcast. You can find more information on Melissa Friedenberg and Jackie Ressler on our website, wwwpearlplancom, as well as on our podcast website, wwwwealthyafterdivorcecom.