The purpose of any divorce is to create new, individual and independent lives after a couple has been in legal partnership. Most people automatically turn to the social and romantic side of divorce and the changes it brings. However, marriage also combines finances for most couples and there is an adjustment once the separation of finances is final.
After divorce, there are many financial details to sift through. A spouse is a beneficiary, emergency contact, and more in a next-in-line and point-of-contact role. Jeff Landers, who contributes a regular column to Forbes, has a list of specific items like estate plans, retirement plans and insurance plans that will need to be changed to reflect a new life. Some of these details are included in the divorce settlement, like how to refinance and sell the marital home. Others, like a will, are independent steps to take outside of the settlement.
In most marriages, it's common for a spouse to give the other a "to do list" at various points. Financial clean up requires the same attitude, but after the divorce. But what happens if the ex-spouse doesn't uphold their end of responsibilities, such as changing the information on a work-sponsored retirement plan?
Put it in writing, Landers suggests, in the form of a financial action plan. The best way to make sure that an ex will update the right forms and move money from Account A to Account B in a timely way is to agree to it in advance. By putting the agreement in writing, there is a contract to turn to should a larger dispute arise out of the situation.
Dotting all the i's
While the divorce is a legal agreement to end a marriage, the truth is that the relationship continues for some time as accounts are settled, negotiated and reconfigured. Court dates often don't align with banker appointments, appraisers and scheduled retirement withdrawals. Instead, former spouses need to work together to meet the terms of the divorce settlement.
The idea of divorce sounds simple on its surface, but there are many lingering details that take time to complete. By addressing as many details as possible in advance, divorcing spouses can reduce conflict, confusion and cost. Anyone considering a relationship change should consult with an experienced family law attorney to discuss not only the bigger picture goal, but the best way to achieve it.