Any Tennessee resident who has been through a divorce understands that it is more than about two people parting and moving along on their separate ways. There may be child custody, child support and spousal support to consider.
At some point, the property division process will take a couple’s combined and separate assets and divide them as mandated by state law. A newly separated spouse with a portion of the couple’s former assets now must protect and nurture them. The following tips can help.
First, look at updating beneficiaries. Divorced couples should look closely at how who will receive their assets and property when they die. They may want to update the names so that property and assets such as real estate, life insurance policies, retirement funds and other financial accounts go to the people they want rather than to those people they selected before the divorce. Changing beneficiaries is usually fairly easy and requires little more than filling out forms.
Second, if necessary, people should amend their will and any power of attorney they have assigned. It may be wise to assign two powers of attorney — one for financial matters and one for healthcare decisions. Third, close joint accounts, including mortgages, credit cards and home-equity lines.
Fourth, people should update their marital status with the Internal Revenue Service. In particular, people need to make sure their tax withholdings reflect their new status.
Fifth, people need to look closely at their financial targets and consult a financial planner to see how the assets can be reinvested or reconfigured to maximize both returns on interest and long-term growth.
Sixth, people should think carefully about how they spend money. Any retirement plan they had before divorce is probably going to change radically and may disappear, so think about setting aside as much money as possible for retirement.
Source: Forbes, “6 Key Money Matters After You Divorce,” Jan. 9, 2015