TAKING THE NEXT STEPS…
When all you want to do is put the paperwork away and forget about the divorce.
One of the incidents that led me to focus as a CDFA happened in my wealth management practice several years ago. A woman came in to see me, bringing with her a copy of her husband’s 401k, two years after her divorce, asking how she could get the half of the balance she had been granted in the divorce. Her attorney had negotiated the settlement, but the next step, to actually transfer the funds, was not the attorney’s role. The client simply did not know how to do the next thing.
Clients often wake up the morning after, expecting that everything will be different, just because the agreement has been signed. They are usually no more prepared to deal with the hands-on practical issues involved in dissolving their economic partnership the next day, than they were when negotiations were still underway. They still need the help and support of their divorce team to move on.
Here are a few of the general issues that clients face, post-divorce. Each case is different, and everyone may not need to deal with every item on the list. Some will need all; all will need some.
Begin by assessing your Assets:
a. Cash assets – This includes all of the following: Checking accounts, savings accounts, credit union accounts, certificates of deposit, money market accounts, securities, stock options, brokerage accounts, mutual funds, U.S. Savings Bonds, precious metals and currency, cyber currency.
Consider: Where are statements sent? Change address? Remove spouse’s name? Open new accounts in single name? Change any beneficiary designations – check Agreement for restrictions. Still comfortable with current financial advisor? Any conflict of interest? (Deal with investment suitability below) Make arrangements for the transfer of funds.
What documentation required to transfer the funds? Simple withdrawal and transfer of joint funds? Additional documents needed? Both spouses may need to sign the withdrawal. A stock power, with signature guarantee (not just notarized) may be required. You may need the services of a financial advisor/CDFA™ to assist with the paperwork.
b. Deferred income assets – These include pension and profit sharing plans, 401(k) plans, 403(b), 457 plans, deferred compensation, SEPs, SIMPLEs, savings plans, Keogh plans and IRAs (Roth and Traditional), stock options, incentive plans, annuities, cash balance plans, etc.
What does the Agreement provide for each of these assets? What needs to be done? Beneficiary designations can now be changed – does the Agreement have any restrictions? Where are statements sent? Change address? Letters of instruction for change of ownership? (See above re: QDROs) If retired, recalculate the required minimum
Determine your Distributions:
c. Motor vehicles – Remember motor vehicles, boats, airplanes, motorcycles, recreational and other vehicles. Do titles need to be transferred? Insurance separated? What kind/how much insurance? Refinance to be done of loan? Keys returned? E-ZPass account separated and tags turned in?
d. Jewelry and collectibles – E.g. stamp, coin, gun, camera, sports memorabilia or other collection of almost any item. Is it in the possession of who gets it under the Agreement? Has it been properly insured?
e. Real estate – Refinance? Mortgage? Home Equity? Who pays? Current bills? Tax deductions? Judgment search? Escrow refund? Tax adjustments? Tax exemptions – remove or add? Have you changed locks, garage door openers and the alarm code?
If the marital home is for sale, who pays for repairs? How is the price negotiated? How are proceeds divided? What if it doesn’t sell right away?
f. Business and professional interests – How are they addressed in the Agreement?
Will there be a buyout lump sum versus stream of payments? How will they be made? When? Secured? How? Do changes need to be made with State for any licenses?
g. Frequent flyer and rewards programs – Will there be a transfer? Buyout? When? Who is responsible for this? Have you changed the email and on-line passcodes/account?
h. Safe-deposit boxes – In whose name? Where? Empty the box/get the keys.
i. Personal property – When will you exchange/remove? Notification? Any triggers if not done? Will there be mediation if it’s not resolved?
I generally recommend that clients continue any counselling from during the process, until they feel they’ve turned the corner. Dealing with these issues may bring up some of the unresolved emotional issues of your divorce. You don’t have to do this alone!
Your attorney may not wish to take this on, and you may be so sick of seeing him/her after the long divorce process that you’re fine with that! Or you may not wish to pay attorney fees to take care of most of this. CDFAs are specially trained to deal with these issues, and can seamlessly step in to finish up what has been brought to a legal conclusion.
Securities offered through Cadaret, Grant & Co., Inc., member FINRA/SIPC. Davis Financial and Cadaret, Grant & Co., Inc. are separate entities.
