Getting divorced is not only an emotionally daunting prospect, but also a financially terrifying one. Not knowing what your cashflow will be and not having familiarity with your finances is one of the leading causes of anxiety during the divorce process. We have collected these tips and put together a checklist to help ease the process.

1. Know your daily money management. Making a fresh start should begin with your finances. Start with your daily money management. Select a system that works with you whether it is an excel template or better yet one of those cool new Apps or programs that do all the work for you. Daily management of your money provides you with your cashflow: your income and expenses per month. It affords you the knowledge of your spending and allows you the opportunity for some forensic work to cleanse expenses no longer necessary.
2. Create a spending plan. We never use the work ‘budget’ – it is right up there with the word ‘diet’ in our dictionary. Spending plans are long-term financial lifestyle changes you make that are realistic. To create a spending plan, you start with the knowledge of your daily money management; then analyze your discretionary spending; and finally, you determine the expenses you feel comfortable with monthly based on your income.
3. Build your own team. You deserve a fresh start with your best foot forward. You need to build yourself a network that is dedicated to your specific needs and desires as a newly independent person. This includes a new accountant, trust and estate attorney, wealth manager, and insurance professional. Using every tool available to you is self care.
4. Embrace the change. If you have changed your name with the divorce decree or relinquished possession of a home, embrace the change proactively. Time is your most valuable asset. Don’t delay in contacting the social security, passport office, and DMV. Change titles on homes, cars, and other joint assets. Buy life insurance, rewrite your will and trusts, and change the beneficiaries on all your current policies.

We know there is a lot to think about so compiling it in a checklist is the easiest way to start the process.

Financial planning
– Create a system of daily money management – know and understand your income and expenses
– Establish a savings account with at least six months’ worth of expenses
– List short-, medium-, and long-term financial goals
– Create a spending plan and savings strategy
– Children — Private school? Extracurricular? Summer? College spending plans? If adult children, annual gifting?
– Home — Are you keeping it? Research cost of moving/renting. What are title implications?

Hire a new wealth advisor
– Understand how you perceive risk
– Define the roles of active and passive investing in the portfolio
– How do you ensure that the portfolio is optimized to avoid impairments and underperformance over time?
– What is the role of diversification in the portfolio?
– How do you diversify across asset classes? How many asset classes and why?
– What is the role of a concentrated portfolio in diversification? What research supports this strategy?
– Does the investment plan support your financial plan?

Start retirement planning
– Define your vision of retirement, including a spending plan.
– What is your plan for a lifetime income stream in retirement?
– Review employer-sponsored retirement plan: refine investment strategy.
– Review your Social Security statement, determine the optimal age to draw benefits.

Legacy goals
– Define family gifting goals and philanthropic gifting goals.
– Irrevocable living trust (if applicable): Protect assets from the impact of taxes.
– Education Goals
– Establish 529 accounts for children and grandchildren (engage your extended family in this very important conversation)

Balance sheet management
– Review loans and optimize borrowing; consider asset-based lending.
– Review mortgage with consideration of a long-term spending plan.
– Consider establishing a line of credit.

Insurance Review
– Establish life insurance strategy: Include life insurance/income replacement.
– Review home insurance for replacement cost coverage, especially in areas with rapidly escalating replacement costs.
– Review health, disability, and umbrella insurance policies for coverage amounts.
– Review all beneficiaries for all plans (including defined contribution).
– Perform expanded insurance reviews: traveler’s insurance, pet insurance, inventory of vehicles and hard assets.
– Determine which policies can be cancelled if no longer needed.

Medical screening and preventative healthcare plan
– Consider a comprehensive diagnostic service, such as an Executive Health Assessment; recent research shows there are simple lifestyle changes that people can make to significantly improve their quality of life and reduce their risk of early mortality.

Basic estate planning
– Discuss advance medical directives and durable power of attorney for medical and financial decisions for adults and children; consider sharing with grandparents and other adults of influence.
– Update all wills, executors and durable powers of attorney.
– Consider adding and ethical will to enrich the understanding of what this money means to the extended family.
– Establish medical power of attorney for adult children.
– Extended family strategy; establish inheritance/intergenerational-gifting strategy (discuss with grandparents); include Roth – – – IRA(s) with grandchildren as beneficiaries.
– Engage a specialist (trusts and estate attorney) for advanced estate planning.

Cybersecurity, identity theft, safety and documentation
– Set strategy for identity theft protection.
– Collect next of kin/family contact permissions.
– Collect a record of safes, storage units and safe deposit boxes as well as accessibility for each.
– Collect records of all accounts, computer files, passwords, photos of personal property, inventory of vehicles and confirmation of financing and ownership.


Before your eyes roll into the back of your head and you drown in overwhelming feelings, know that we can help! Judith Heft & Associates is 100% owned and operated by women. Plus, we’ve all been divorced. Our experiences were different, and we’re all in different stages of life, but we’ve gone through the process. That makes us uniquely empathetic and compassionate to people making that same, momentous change in their lives. We have a deep understanding of what it means to get a fresh start and rebuild — and how that goal can be achieved. As experts with providing you financial freedom, we’ll also hold your hand through this entire process. You’ll have an opportunity to come out the other side better, stronger, and smarter. Yes you can!

By Liz Levy
Judith Heft & Associates
liz@judithheft.com
www.judithheft.com