In our last blog post, we discussed steps a recent divorcee can take to provide for both current and future financial success. In addition to establishing a monthly budget, saving for an emergency fund and consulting with a financial professional; an individual would also be wise to update important documents to remove an ex-spouse and reflect one’s current circumstances.
Many Maryland residents can likely recall filling out a lot of paperwork when starting a new job or applying for life insurance. Few may realize, however, that a divorce decree has no bearing on these types of documents. Therefore, if an individual who dies failed to update beneficiary designations on retirement accounts or insurance policies, his or her ex-spouse will receive those assets.
In addition to updating beneficiary information, an individual should also take steps to update an estate plan to ensure an ex-spouse is exclusively omitted. Depending on the division of marital property, recent divorcees should also take steps to remove an ex-spouse’s name from a car or home title. Individuals would also be wise to ensure they are no longer paying to cover an ex-spouse’s possessions as related to auto, home, boat or other types of insurance.
In some cases, even after an individual has taken steps to establish a budget, pay off debt, start saving and update important policies and beneficiaries issues still crop up. A forgotten joint account may still be open or the actions of an ex-spouse may somehow still negatively impact an individual’s credit score. It’s important, therefore to regularly monitor one’s credit score and take action to resolve any errors.
Source: Daily Finance, “ 22 Tips to Transform Your Financial Life After a Divorce ,” Robert Pagliarini, July 28, 2014