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.
- 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.