Breaking Up is Hard, Says Jew
How to Dissolve Your Marriage,
Not Your Financial Security
Divorce can be traumatizing. Not always, but even in the most amicable situations separation is a nuisance. Yes, this is how I spent my summer vacation.
Think you’re done once you’ve had her beheaded, Henry (VIII)? Review the beneficiaries on your retirement accounts. Do you still want your ex on them? You might. Be sure to rummage through your papers and contact the custodian for that 401(k) from your stint at Apple fifteen years ago. You may have neglected to roll it over. Hell Henry, you may still have Anne Boleyn on that account.
Do you have life insurance? (If not, why not?) Who gets the proceeds? If you have minor children you may want to consider placing life insurance in a trust. Do you have a will? Do you really want the state’s “intestate” rules to decide who gets what when you kick the can?
(I am insurance-licensed. Don’t fire me, e-mail me.)
Does your ex have life insurance? What will substitute for child support if he goes sky diving and it doesn’t work out? You may want to makestipulations in your divorce agreement (not to prevent his self-indulgence but to require you be the beneficiary on his policy until Rocket and Elektra are a certain age.)
Is it clear from the divorce agreement who is claiming the children? Can either of you file with the more favorable head of household status? Sometimes both can — if you have two children and meet other tests. Maybe one of you now qualifies for the earned income credit. You may want to adjust your salary withholding to avoid sticker shock or that lesser horror, an unduly large refund (when you really needed the cash during the year.)
(My snazzy tax software can help project the results.)
Are you prepared for the pending financial changes?. The child support could be substantial — even if you share custody and are paying for Ripley when he is with you as well. Child support is based on respective incomes, not how much pizza your teen eats at each location. And no, it is not tax-deductible.
Are you the child support recipient? Prepare a budget to help navigate your new situation. It can be difficult in the beginning — you’ve lost the efficiencies of one household — and your earning power may be reduced because of increased domestic responsibilities. You’ll make it through. and the raw emotions from your past life will pass. You might marry again (and again and again), Elizabeth (Taylor), and Richard might even be available for a second fling (Burton, that is, not Streitfeld).
I am excited to be participating in a free October webinar, Financial Planning For Families with Special Needs. Write to me.
