Delta Community Retirement & Investment Services
Whether you’re going through a divorce or have recently lost a loved one, the transition from partnership to coping with the loss of companionship can be difficult. There’s more to consider than just the change of routine—financial changes will be significant.
Going through a divorce is usually a strenuous time, and while dealing with the emotional ramifications may seem most important, do not overlook your financial matters. By establishing a plan and working with a professional when needed, you may be able to ensure your best financial outcome and avoid any negative affect on your credit score. We have provided a checklist to help you prepare for difficult discussions and decisions during your divorce:
Checklist – Financial Planning for Divorce
- Start by assembling either an individual or a team of experts who can advocate for your interests. Consider hiring your own attorney, Certified Divorce Financial Analyst and financial consultant. Divorces are complicated and experienced professionals can help guide the process and keep proceedings on track.
- Maintain or work quickly to establish good credit. If you don’t have access to credit in your own name, discuss with your attorney your options for obtaining a credit card or establishing a line of credit.
- Monitor joint bank and credit accounts—seek legal guidance and consider closing or freezing them.
- Keep a spending journal to assess your expenses and calculate how much you’ll need to operate your life independently.
- Confirm the prior year’s tax return and payment/refund have already been processed.
- Evaluate the financial cost to raise your children. Consider expenses beyond health, housing and food, such as summer camp, orthodontia, cell phones, car insurance and college tuition.
- Consider the spendable value of retirement assets vs. non-retirement assets, all dollars are not equal.
- Understand the purpose of a Qualified Domestic Relations Order (QDRO) for retirement accounts and the need to get it completed and filed at the time of your divorce.
- Note that for alimony, the spouse receiving payments should be the owner of the life insurance and the spouse making payments should be responsible for the premiums. Protect your spousal and child support payments with life insurance.
- Update all beneficiary designations and estate planning documents following your divorce (will, trust, Financial Power of Attorney and Advanced Medical Directive). Remember, a marriage negates a will, but a divorce does not.
- Understand your health insurance options and, if necessary, apply for COBRA within sixty (60) days of your divorce.
Recommendations Affecting Children
- Establish a custody agreement and parenting plan for children.
- Consider relocation restrictions, adjustments for changes in income or the remarriage of one or both spouses.
- Determine who will claim the children as dependents on tax filings going forward.
Recommendations Regarding the Home
- Be careful not to contest ownership of a marital home that you cannot afford.
- Determine the tax implications of selling your home or liquidating investments.
Recommendation on Paperwork and Accounts
Before the divorce begins, gather all important paperwork, including:
- Three years of complete personal and business tax returns.
- Evidence of income (pay stubs, rent, dividends, royalties, distributions from business ownership, recent lottery winnings).
- All bank or credit union records, including personal and business deposit relationships.
- Paperwork for health or medical savings accounts.
- Records of outstanding debts owed by you and/or your spouse. These may include student loans for you and your children, credit cards, vehicle loans, mortgages, etc.
- Consider pulling a copy of your credit report and any loan applications made within the last five years to identify potentially hidden assets.
- Investment account statements.
- Records of current and former employee benefits, including pensions, 401(k), Stock Options, Deferred Compensation Agreements, etc. Research the survivor pension benefits for the non-employee spouse, and don’t overlook military benefits.
- Property titles (such as primary residence, vacation home, and rental properties).
- Insurance policies (including life insurance—from an insurance firm directly or an employer—as well as auto, medical, accident, cancer, disability and property & casualty insurance). This includes finding copies of current life insurance policies owned by or insuring the life of either spouse or your dependent children.
- Annuity contracts.
- Lists of personal property including furniture, jewelry, artwork, antiques and collectibles (stamps, coins, gold, and porcelain).
- List of accounts for shared digital assets (movies, books, music, and photographs).
- A list of safety deposit boxes with a contents inventory.
- List all memberships (country club, golf, gym, spa, subscription boxes, Amazon Prime®, Costco®/Sam’s Club®) and travel, mileage or cash reward points.
Experiencing a divorce can be difficult in many ways. It is a situation where it’s very important to seek out the advice of legal and financial professionals to help guide your decisions and actions.
Dealing with the Death of a Partner or Spouse
The death of a loved one is one of life’s greatest hardships. While some of the activities required to settle the estate can be dealt with in time, others need to be handled more quickly. The responsibilities of dealing with the loss of a spouse are confusing and overwhelming, and looking to a professional to assist you could be helpful. The checklist below can help you prioritize what you should focus on. Remember, the first year after the death of a spouse is likely to be difficult, and you need to be prepared to manage many activities, financial and otherwise.
Checklist – Financial Planning After the Death of a Spouse
- Search for paperwork on any pre-paid funeral services or burial plots.
- If personal expenses are incurred for final care related to the death of a loved one, begin to collect receipts for reimbursement from the estate or trust.
- Locate an original, executed Will or Trust to identify the named executor and the beneficiaries of the estate.
- Legal and financial obligations will arise soon after a person’s passing, so it’s important to gather all critical documents, including:
- At least 15 original copies of the death certificate from the funeral home or county clerk. Many companies require that they be provided with an original death certificate before taking action on an account, such as a credit card company. There is generally a cost for each certificate, so keep the receipt for the certificates as it may be a reimbursable expense paid by the estate. Also scan and create a digital copy of the certificate.
- Driver’s license, Social Security card, birth certificate, adoption paperwork, former divorce decree or legal separation agreements, marriage license, military separation papers and citizenship documents. Also scan and create digital copies of these documents.
- Property deeds, motor vehicle titles, promissory notes and loans.
- Your spouse’s credit report to help identify outstanding balances or extension of credit.
- Insurance policies (Life, Auto and Home Insurance)
- Financial account statements, including credit cards.
- If needed, statements for other ongoing payments, such as for utilities, cell phone service, 529 college savings plan, gym and other memberships.
- Stock certificates.
- Last completed income tax return and supporting forms.
- Consider scheduling an appointment with a financial expert. A professional will be able to guide you through the many decisions that will need to be made. Oftentimes, these decisions cannot be undone and affect both your life and other family members. It is important to seek guidance early.
- Provide notifications of death to the following; you may need to provide an original death certificate to many of these institutions:
- Social Security Administration (SSA) and Medicare. Request guidance from SSA on death benefits, survivor benefits and benefits for eligible minor children.
- Insurance companies, including car insurance. Notify your employer of your spouse’s passing to claim spousal life insurance benefits, if elected.
- Spouse’s current and former employers. If you or your spouse are a member of a labor union or if your employer has an Employee Assistance Program (EAP), counseling or support services may be available at no charge.
- Financial institutions (banks, credit unions, investment firms, lienholders, credit card companies, PayPal®, and others.). Don’t forget to contact creditors to remove your spouse’s name from any joint accounts, as well.
- Admissions office for your college student’s school – additional financial assistance may be available following the loss of income.
- United States Department of Veterans Affairs, if applicable.
- Contact the attorney that handles your family business affairs to learn what steps need to be taken for succession.
- Cancel all subscriptions, professional associations or personal memberships where your spouse was the sole member (country club, golf, gym, spa, etc.).
- Claim and transfer, if possible, travel, mileage or cash reward points in your spouse’s name to your own account.
- Update your personal Estate Planning documents, following the loss of your spouse (Will, Financial Power of Attorney, Advanced Medical Directive and named beneficiaries).
- Revise your financial plan, establishing new goals and evaluating your resources.
How We Can Help
Please know that we are here to assist you during this very difficult time. For more information, please fill out our request form. You may also call 404-677-4890.
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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Delta Community Credit Union and Delta Community Retirement & Investment Services are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Delta Community Retirement & Investment Services, and may also be employees of Delta Community Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of Delta Community Credit Union or Delta Community Retirement & Investment Services. The Delta Community Retirement & Investment Services site is designed for U.S. residents only. The services offered within this site are offered exclusively through our U.S. registered representatives. LPL Financial Registered Representatives associated with this site are licensed in all 50 states.
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