Post Divorce Checklist
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A post divorce checklist is related to various aspects of life, like child support, financial conditions, career, employment, retirement, child custody and property distribution. There are many vital things that should be managed by the spouses after getting divorced. Some are on personal level, while some are related to financial conditions. Following are some important points which are to be considered:
Items in Post Divorce Checklist
- The settlement might not have dealt with the topic of disbursing the expenses of divorce. In this case, it is essential to decide on a payment plan that is acceptable to the spouses. Mostly, the expenses are to be divided equally between them.
- The divorced spouses must prepare income tax estimates with the help of an accountant. This would prove useful in making quarterly tax payments. If the spouses do not observe this step, it may result in IRS (Internal Revenue Service) fines and penalties when the returns are filed.
- The spouses should request their lawyers and other experts to provide a written document that points out the portion of their fees that can be deducted under IRS code section 212.
- Generally, divorced parents have a feeling of guilt towards their children and hence, they tend to spend more money on the children. However, it is recommended that the parents should reveal their financial condition to the kids in an honest manner. This would not result in the children hating them for not meeting their demands. It would help them to cope up with the reality. Moreover, the parents could save some money for the education of the children.
- The custodial parent must maintain a record of the costs of raising the children. They should compare this document with the child support amount being paid by the non-custodial parent. The alteration in the child support can be requested on the basis of this documentation.
- The custodial parent must maintain a precise record of child visitation schedules. This would enable them to detect if the non-custodial parent is observing the court orders.
- Each parent should discuss the following issue with a financial advisor - 'whether the investments are adequate according to the risk tolerance.' The parent should not adhere to a conservative approach while dealing with savings.
- The spouses must intimate their creditors that a divorce has taken place. Also, make it known that the ex-spouse is presently responsible for some debts. It is essential to keep a watch whether the ex-spouse is repaying the debts. This is to make sure that the credit rating of the other spouse does not suffer.
- Let us assume that some assets were registered in the names of both spouses during marriage. Post divorce, the spouses must ensure that the registration has been altered. For instance, the brokerage accounts or car registration. The court orders for property division should be followed while making new registrations.
- The divorced spouses must arrange a meeting with a career advisor to chalk out a career plan. This must be inclusive of the education following employment.
- The spouses must retain the tax returns and supporting documentation in a secure location for minimum 3 years.
- As per the settlement, one spouse might get some assets or investments from the other spouse or a related broker. The recipient spouse must request for tax records soon after the finalization of the divorce. This would prevent frustrating tax consequences.
- Every divorced spouse should hire an investment manager. This would assist the spouse in case of allocation of investments, implementation and monitoring system.
- Post divorce, all estate planning documents must be rewritten. This is inclusive of the directive to physicians, durable power of attorney, trusts and personal will.
- The divorced spouses must ensure that the retirement assets are transferred as per any QDRO (Qualified Domestic Relations Orders)
Thus, these are some financial aspects of post divorce conditions. These aspects are to be taken care of with proper attention. Otherwise, avoidable mistakes can lead to a complicated economical situation between partners. Personal checklist after a divorce should comprise of following points: