After the divorce is done, most people still have a to-do list of loose ends that need to be wrapped up. Failing to complete these tasks can set the newly divorced up for disaster. So, without further ado, please go through this list and create your individual checklist.
1. First things first. If you do not have one already get a certified copy (or two) of your divorce decree. Generally, this is available from the Clerk of the Court in the County where your divorce took place.
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2. Read your Marital Settlement Agreement (MSA) again. Look for details and deadlines. Become familiar with the tasks and follow-ups the MSA says you must complete.
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3. Did you change your last name as part of your divorce? You may have a separate court order that makes this name change official or it may be recorded in the final decree. Either way, for your name change to take effect, you need to request a records update. Start by updating your name with the Social Security Administration and get a new Social Security card. Next you will notify the driver’s license and passport agencies. Finally, you will notify your banks, insurance companies (life/home/auto), credit unions, credit card providers, student loan administrator, cell phone carrier, utilities, etc.
4. Verify that all your home utilities are in your name.
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5. Make sure you hold title (or are the registered owner) of every vehicle that is listed as yours in the MSA. If not, make sure you get your Ex to transfer these assets to you. (If there are outstanding loans, the loans may have to be paid off before you can transfer title.) Finally, make sure that the DMV has the correct information.
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6. Make sure you are the listed owner of every life insurance policy that is listed as yours in the MSA. If not, have your Ex sign a change of ownership form from the insurance company, send that form to the insurance company, and make sure the insurance company has updated their records.
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7. Redesignate beneficiary selections on your life insurance policies, retirement accounts, and bank accounts. Even if you are not changing beneficiaries, you should notify every financial institution you are connected to regarding your benefit selection.
8. Sort out your health insurance coverage. If you were covered on your ex’s medical insurance, start researching your health insurance options asap. Look into COBRA (which should be offered from your previous provider), the Affordable Health Care Act (Obamacare), a private insurance policy, or a plan offered through your employment. You may be able to have COBRA coverage for up to 36 months after divorce. (COBRA is usually expensive and you need to apply quickly.)
9. Now that you are single, you should think about who you want your medical surrogate to be. Talk to an Estate Planning attorney about preparing necessary documents.
10. If you are not comfortable with the tax accountant or insurance agent you used while married ask friends for recommendations and find new providers.
11. Create a post-divorce budget. What income can you count on? Which of your expenses are fixed and which are discretionary?
12. Protect your credit. Open new credit cards in your name alone. Close all joint credit cards and remove your spouse as an authorized user from your accounts. Before doing so, make sure all credit card bills and loans are paid off. (These actions may cause a significant ding to your credit score so be cautious if you will need automobile financing, a mortgage, or an apartment lease in the very near future.)
13. Transfer any automatic payments that you’re responsible for to your new credit card or bank account.
14. Run your credit report before, during, and a few months after finalizing your divorce to verify no joint accounts remain open and there are no surprise debts. If you see errors or other issues on the credit report, contact the bureau immediately and get these discrepancies resolved; errors can impact your credit and cause you to pay more for loans and insurance, and they can even make it difficult for you to get a new job or rent a new home.
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15. Close joint bank and brokerage accounts and open new accounts in your name alone. Consider moving money to a different financial institution that your Ex is not connected to.
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16. Many couples face several loose ends regarding their home and mortgage. What you must do will depend on how you agreed to divide your home and exactly what your MSA says. If you agreed to sell the house, then you’ll want to move forward with preparing the house for sale. Hopefully your MSA includes language about what happens if you and your ex don’t agree on details. (What happens if one
wants to accept, and one wants to reject an offer? Who will cover the costs of any necessary replacements or repairs prior to sale?) If one spouse is keeping the house, the other spouse will need to transfer their ownership of the house. This is typically done with a Quit Claim Deed or Interspousal Transfer Deed. The deed should then be recorded at the county recorder’s office. HOWEVER, this transfer should not happen until the spouse keeping the house has removed the other spouse’s name from the mortgage promissory note and paid the vacating spouse any agreed buy out payment.
17. Change the locks if you kept the marital home.
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18. If you are dividing pensions or other retirement accounts (except IRAs) you will need a QDRO. (Ideally, this should have been prepared prior to the final hearing.) Choose a QDRO preparer who specializes in this field and will complete the process for you. If you are the spouse who is receiving the benefit you should hire and pay for the QDRO preparer since you are the spouse who needs more protection.
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19. Review your tax withholding allowances with your accountant.
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20. Set your support payments on autopilot. Auto transfers or direct deposits will eliminate the need to deal with monthly child support and alimony payments. If you are the receiving spouse and your Ex is resistant to doing this look into having the payments come directly from their employer through your state’s disbursement unit. Post divorce many people feel financially vulnerable, having no one to turn to if they get
laid off or suffer a financial setback. You can create an emergency reserve or cash safety net by setting aside six months of living expenses in a liquid bank account. Another option is buying a disability and/or critical-illness insurance policy for yourself. These policies provide you with a monthly “paycheck” if you become injured or ill and cannot work, providing peace of mind that your financial life will not be ruined if you
suffer from a long-term disability or illness.
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21. Change all your passwords. Do not use passwords your Ex (or anyone else) might be able to easily guess.