Financial Tips After a Divorce

man giving advice to a client
September 2, 2021

Divorce is a major life change, and it can be very stressful to think of all the to-dos in the middle of the emotional roller coaster. Here are some things to take care of after the divorce is final.

1. Cancel Joint Accounts – make sure you close all joint accounts with your ex-spouse, including credit cards, bank accounts, and investments accounts. Joint accounts that remain open are liabilities that could hurt you financially.  

2. Change Beneficiaries – update your beneficiaries on your pension, 401k, IRA, and life insurance policies. Changing beneficiaries is usually as easy as filling out a form. You should list both primary beneficiaries and contingent beneficiaries.

3. Update Insurance Coverage – call your insurance agent about your automobile, homeowners, and umbrella liability coverage. To protect your assets, an umbrella liability policy may be appropriate.

4. Have Emergency Funds – now that you are single, it is important to have emergency funds that total about six months of living expenses.

5. Check Credit Score – check your credit score with all three credit bureaus. If you see any errors, contact the bureau, and get the discrepancies resolved. Having bad credit can impact your credit and cause you to pay higher interest rates on loans, higher insurance premiums and make it harder for you to rent a place to live or get a new job.

6. Update Estate Plan – work with an estate attorney to update or create a power of attorney for healthcare and finances, living will, and a trust if you need one.

7. Evaluate Investment Accounts – make sure you know how your accounts are invested and that your risk tolerance is in line with your investments. Work with a financial advisor to make sure your investments are suitable for you.

8. Create a Financial Plan – work with a financial advisor to help analyze your financial situation after the divorce to make sure you are on track for retirement, what your budget should look like, and make sure you meet your financial goals going forward.

If you need any help with any of these items, contact us at Greenberg Financial.

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