December 31, 2016

A Financial Checklist for Divorce

A Financial Checklist for Divorce

Use the following financial checklist if you find yourself considering divorce. This list is not all-inclusive and is no substitute for the professional assistance of your accountant and attorney.

When contemplating divorce

  • If you don't already have a credit card in your own name, apply for one.  
  • Consider establishing a credit history in your own name by taking a small bank loan. If necessary, have a friend or relative cosign.

When divorce has been decided upon

  • Get a lawyer. If you don't know any, ask friends or the state bar association for recommendations.  
  • Close out joint credit and checking accounts.  
  • Take taxes into account when dividing property. Assets equal in value may not be equal in their tax consequences.  
  • Have your attorney specify the tax advice portion of his bill. If you meet the level for deducting miscellaneous expenses, this amount will be tax-deductible.  
  • Be sure your divorce agreement addresses who gets to claim estimated taxes already paid and who pays any additional IRS assessments on joint returns filed in prior years.

After divorce

  • Check all insurance policies as well as your IRA and other pension plans, and change coverage and beneficiaries as appropriate.  
  • Review your will for appropriate revisions.  
  • If you're receiving alimony, consider an IRA. Alimony is considered compensation for IRA contribution purposes.  
  • Review your tax withholding and estimated tax payments for any necessary adjustments.

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