0 A Post-Divorce Checklist

• Divorce
• by William F. Davis, CFP®
• 03/13/2025

Welcome to your new life! Now may be the time for a fresh start. Maybe this means making that major purchase that you may have been held back from making – a shore house, a new convertible, a boat. Or taking that much-needed vacation with friends – you certainly are now "free" to roam about the country – but only if it’s in the budget. In other words, make sure you plan for it. But before you pull out your checkbook or credit card, make sure that you put together – and complete – a checklist of items that will help prepare you for your new life. Assemble your post-divorce go-to professionals. Going forward, you will still need good advice from a legal and financial perspective – so be sure you have someone on hand to help with investments and estate, retirement and tax planning strategies, etc. – and all the things mentioned below. Divide investment assets and retirement plans according to the terms of your divorce settlement agreement. To divide 401(k)s or other workplace retirement plans (but not IRAs), you may need a Qualified Domestic Relations Order (QDRO) from the court with specifics that plan administrators need to follow on how to pay out and structure the benefits and/or account. Change your emergency contacts (and name, address, if necessary) on all your information at work, doctors’ offices, health club, etc. Thoroughly review your credit report. Cancel any joint credit cards or accounts that remain. Update your estate planning documents – will, power of attorney (medical and financial), trusts. If you don’t have these documents in place – now may be the time to get them done! Update all beneficiary designations. Workplace retirement plans (pensions, 401k/TSP/403b plans), investment accounts, retirement accounts (IRA, Roth IRA accounts), trusts, annuities, life insurance and anywhere else you may have listed your former spouse. Research your health insurance options and apply for COBRA (if necessary). Please keep in mind that COBRA is only temporary, and is designed to hold you over until you get your own policy – either through work or elsewhere. Put together a spending plan for your new life. Your financial circumstances have likely changed as a result of your divorce. Take measures to ensure that your settlement lasts as long as absolutely possible. So when you’re sitting on a beach somewhere with friends celebrating your new beginning, you’ll feel much better knowing your financial and estate planning strategies are in order – and your trip is a reward for getting them done. Now go out and have a great time – and enjoy the kick-off to your new life!   ---   Bill Davis is a CERTIFIED FINANCIAL PLANNER™ and Certified Divorce Financial Analyst (CDFA). He is the Managing Partner with Vericrest Private Wealth LLC, a financial advisory firm in Newtown, Pennsylvania.  

0 Divorce and Social Security: Your Ex's Record Might Still Pay Off

• Divorce
• by William F. Davis, CFP®
• 03/06/2025

Divorce is a financial gut punch—splitting assets, rewriting budgets, maybe even selling the house you swore you’d never leave. But here’s a twist you might not see coming: your ex’s Social Security could still have your back. Yep, even after the ink’s dry, there’s a chance to claim benefits based on their record. Don’t get too excited—it’s not a jackpot, but it’s a lever worth pulling if the numbers line up. First, the ground rules. You can tap into your ex’s Social Security if the marriage lasted at least 10 years, you’re 62 or older, and you haven’t remarried. (Remarriage is the kill switch here—tie the knot again, and this option’s toast.) Oh, and your ex? They need to be eligible for benefits too, though they don’t have to be collecting yet. The kicker: your own benefit has to be smaller than what you’d get off their record. If it’s not, you’re stuck with yours. Fair? Maybe not. Practical? Absolutely. Now, let’s talk timing, because this is where it gets interesting. Claiming early—at 62—shrinks your payout, while waiting until your full retirement age (somewhere between 66 and 67, depending on when you were born) keeps it intact. Delay past that, and it grows a bit until 70. Figure 1 below lays it out clean: early birds get less, patient types get more. It’s a choice that can swing your monthly check by hundreds. Here’s the rub: you don’t need your ex’s blessing. No awkward phone call, no sign-off required. The Social Security Administration doesn’t even tip them off—it’s all between you and the feds. That said, don’t expect them to spoon-feed you the details. You’ll need your marriage and divorce docs handy, and probably a few hours to wrestle with the paperwork. Pro tip: call ahead or hit SSA.gov unless you fancy a day trip to the local office. What’s the payoff? Up to 50% of your ex’s benefit at their full retirement age, assuming it beats your own. If they’re a high earner and you’re not, that’s real money—maybe enough to offset the hit from splitting the 401(k). But it’s not extra cash on top of your own benefit; it’s an either/or deal. The system compares the two and hands you the bigger slice. Simple, not generous. Divorce might’ve torched the “happily ever after,” but it doesn’t have to torch your retirement. This benefit’s a quiet perk—easy to miss if you’re not paying attention. So, dig out those old records, run the numbers, and see if your ex’s work history can still do you a solid. It’s not revenge – it’s just good financial sense.