Thursday, August 7, 2014

Have You Tied Up Those Loose Ends?

Once the final divorce decree gets entered my job is essentially done-- unless later on people need to revisit support issues or modify their time-sharing arrangements with kids, and these two things do happen all the time as families continue to experience changes in life.  Some people are great about working together post-divorce and addressing these issues themselves, others not so much... but I'll save that for another day.  Today I want to highlight a few things that many forget to do after they separate and/or divorce, such as:

1. Wills & Powers of Attorney- You need to find a trusted person to act as the executor to your Last Will and Testament and/or trustee for any money you will leave in a Trust to your children.  Also, if something happens to you, who will make medical decisions for you and/or manage your money?  Health care power of attorney designations need to be updated and you may want to consider having a Springing Power of Attorney, which essentially springs into effect if you are incapacitated and allows someone to pay your bills, etc.

2. Beneficiary Forms-- You need to contact your life insurance provider and retirement plan administrators and update the forms so that money doesn't accidentally/unintentionally go to your ex-spouse.  If you haven't set up either of these things previously, now is the perfect time to contact a financial planner that can help you determine the appropriate amount of insurance you will need to protect your loved ones and a target amount of contributions you need to start making to provide for yourself when you retire.

3.  Health Insurance- If you are dropping someone from your health insurance plan due to a divorce, you need to let the company know, and if that person is entitled to COBRA, they need to get the right forms asap.  If you need to get your own policy or add a child, don't delay in getting all the information necessary.  There are some very unforgiving deadlines that must be met and ignorance of the law is no excuse.

4. Banking- Have you updated all your contact information and closed out all joint liabilities?  If you have any doubt that your spouse may have opened accounts in your name without your knowledge, then get a credit report and make sure all the information is correct.  Unless you have agreed to maintain a joint account for some reason, it really isn't smart to leave these open beyond the agreed upon date.  And finally, if you are expecting a transfer from a retirement account, it really is up to you to follow up.  Once lawyers get the signed court orders and submit it to the plan providers, we thens to close out our files.  Clients have to be on the ball about notifying the right point of contact if a transfer is not made in a timely fashion.

The bottom line is that long after the divorce case ends, there are lingering issues outside the divorce process that need to be addressed, and people need to be proactive about taking care of these loose ends.  No one else is going to nag you or follow up with you about these things, but they are important and should not be ignored.  It may be a pain to go through, but once you are done, I promise you will feel an incredible sense of accomplishment-- and complete freedom.

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