Life 101: Divorce and finances

When going through a divorce, evaluate your finances and make needed updates. This list of must-dos can help protect you as you move forward.

Preparation for divorce

A divorce checklist can help you through the process. Here are a few things to do prior.

  • Collect and make copies of important documents. Examples include tax returns, financial and bank statements, retirement and insurance account details and wills. Be sure to make note of passwords and usernames to online accounts.
  • Change your address as necessary.
  • Establish a separate bank account and change direct deposits.
  • Update beneficiary designations for retirement or investment accounts and insurance policies.
  • Inventory your home. List items by value and remember to include any sentimental pieces.
  • Consider finding a reputable divorce lawyer, whether you plan to go to court or mediate. A divorce involves several contracts, and legal expertise can be helpful.
  • Evaluate your budget. You may have increased living expenses, including rent or a new mortgage, as well as a change in tax status. Take stock of your assets and debts, too.
  • Create new legal personal documents, including a will and power of attorney.
  • Research life and health insurance options. If you are on a spouse's policy, you will need to find your own coverage.
  • Do not sign anything until you have time to evaluate its immediate and future impact.
  • Review all your insurance policies, coverage and beneficiaries named. This includes any homeowners, renters, auto, health and life insurance.

After divorce

Post-divorce there are still things to do to ensure your finances after divorce are set up appropriately. Also, your life insurance policies and coverage should be examined or changed, especially when children are involved. Be sure to update and change any wills and other legal documents if needed.

Figuring out finances is not always easy. Many people choose to get advice and consult a financial professional.

Your State Farm® agent can help you navigate insurance and financial decisions throughout the process.

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The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

Neither State Farm® nor its agents provide tax or legal advice.

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