Steps to Take After a Divorce is Final

Woman at home checking the mail

The divorce process can sometimes feel long and emotionally difficult, making it tempting to move on and forget about it after the final divorce decree is entered. But before you finish this chapter of your life, there are some steps you will later thank yourself for taking. Knowing what to do after your divorce is final can be key to setting yourself up for a successful next chapter in your life.

Checklist for Steps After Divorce is Final

Your Judgment of Divorce legally terminates your marriage and also includes many requirements as to how property will be divided and mandates about “the new normal”. Read the judgment carefully and create a personalized checklist for each thing the order says “the parties shall” (or “will”, or “must”) do. Your final divorce decree may require you to take additional steps related to:

  • Homes and real property
  • Vehicles and other personal property
  • Bank accounts and investment accounts
  • Retirement and pension accounts
  • Child support and spousal support payments
  • Debts and credit accounts
  • Insurance
  • Beneficiary designations
  • Name changes

There are many checklists available online for steps after divorce is final, but no two families are identical. Your judgment may be distinctly unique. If you and your former spouse run into problems with the execution or enforcement of your judgment, a post-judgment action may be necessary. In such an action, your judgment might control:

  • Which party must take the action
  • Who will pay for legal fees and administrative costs
  • Deadlines for taking action
  • Potential consequences (or sanctions) for failing to act

Before spending money on a phone call or e-mail with your attorney, go back and read your final divorce decree. Don’t assume you remember it correctly. Then if you have questions, talk to your divorce attorney to be sure you understand your rights and obligations after divorce. Do not delay in taking all the steps necessary to execute your judgment, or you could end up without a remedy. For example, if your former spouse dies unexpectedly before you exercise all your rights, you may end up legally forfeiting a right.

How to Make Sure Support is Paid After a Final Divorce Decree is Entered if You are Being Paid Through the Friend of the Court

  • If your judgment requires an Income Withholding Order, the Friend of the Court will create this and you should get a copy.
  • If your judgment requires you to pay directly to the Friend of the Court, review the Michigan State Disbursement Unit (MiSDU)’s website to set up an account and make payments. Consider recurring monthly payments you can set up from your bank account.
  • If you are receiving support through MiSDU, set up an account and direct deposit information.

If you are ordered to pay child support or spousal support as part of your Judgment of Divorce, you will want to act quickly to make sure you don’t fall behind on your payments. It may take time for the Friend of the Court to enter an Income Withholding Order and send it to your employer. In the meantime, exchange payments for Direct Credit Slips provided by the Friend of the Court, and once your account is established, file the credit slips to zero out any arrearage that may appear on the books and records of the enforcement unit.

How to Handle Homes and Real Property When Divorce is Finalized

  • Sign quit claim deeds to transfer ownership of homes and other real property. The party benefiting from the transfer typically has his/her attorney prepare the deed. Note: An attorney cannot prepare a deed for real estate located in a state where they are not licensed to practice: they will have to help you find a real estate attorney in that state to prepare that deed.
  • Refinance the mortgage to remove your spouse’s name as may be required by your Settlement Agreement or judgment.
  • List the home for sale with a realtor as may be required by your Settlement Agreement or judgment
  • Pay your spouse their share of the equity in the home, if required by your Settlement Agreement or judgment. It is often best to instruct the Title Company to cut two checks, one for each spouse.

Real estate – including the marital home – often takes the most work after divorce is final. If you will be keeping the home, you may need to work with banks or financing companies to remove your ex-spouse’s name from the mortgage, and obtain your own financing to pay them their share of the equity. It is a good idea to start the pre-approval process a few months before the divorce is finalized as qualifying takes time. Usually, you will need a signed Settlement Agreement and maybe even a judgment signed by the judge in order to finalize your loan application.

If you plan to sell the home, you must contact a real estate agent, coordinate with your ex-spouse to make any recommended repairs, and then work with them to get the property listed, respond to offers, and go through closing. Sometimes your final divorce decree will give one spouse the authority to sell the home on their own. More often, it is assumed that you will work together to get the best deal for both parties.

Dividing Up Vehicles and Personal Property After Divorce

  • Sign over titles to vehicles
  • Take signed titles to the Secretary of State to get a new title
  • Divide up keep-sake property as described in your judgment
  • Schedule a time for you or your spouse to remove all personal property from the marital home
  • Recruit friends (or in severe cases get the assistance of a peace officer) to help with the move

Often, personal property gets the least attention in your Judgment of Divorce. It might simply say that each party keeps his or her own personal property, or the property in their possession. If you and your spouse have lived separately for a while, that may be enough. But if you are more recently separated, or if one party left without going through their possessions, it may take time, and possibly mediation to divide yours from theirs.

Bank Accounts, Investments, and Retirement Accounts After Divorce

  • Close or remove your spouse’s name on joint bank accounts in accordance with your Settlement Agreement or judgment.
  • Open new accounts in your name, only.
  • Transfer direct deposits and automatic payments to your new accounts and stop them from coming out of old accounts.
  • Have the Court enter a Qualified Domestic Relations Order (QDRO or EDRO) for retirement accounts. This may need to be prepared by a specialist whom your attorney can recommend.
  • Meet with your financial planner to update your investment strategy
  • Change your beneficiaries and payable on death designations

It is a good idea to open new bank accounts after your divorce is finalized. This will remove any possibility of your ex-spouse, or their creditors, getting access to funds that belong to you. You must also file new beneficiary designations for each account you carry forward to prevent your spouse from receiving your share of the money after you pass away.

If you and your spouse are dividing retirement assets (including pensions or 401(k) accounts, your divorce attorney will have a Qualified Domestic Relations Order (QDRO) prepared and entered by the Court. Sometimes this happens after your divorce is finalized, but it often can be done during the divorce. Also, if your spouse gets behind on child support or spousal support, and has a retirement account, a QDRO or EDRO may be a good way to satisfy any such arrearage. This order allows your retirement assets to be transferred without incurring taxes and early withdrawal penalties - but note- this is not true for IRA accounts.

IRA accounts will incur both taxes and early withdrawal penalties if liquidated at the time of transfer rather than invested in another retirement account: check with your investment advisor, CPA or tax accountant to ensure you do not inadvertently trigger taxes or early withdrawal penalties when executing the retirement account provisions of your Settlement Agreement or judgment. Before the QDRO is entered, take a copy of your Settlement Agreement to your financial planner to discuss your new plan for investments and retirement savings.

Debts and Credit After Divorce

  • Close joint credit card accounts, and remove yourself as an authorized signer on accounts you are not retaining
  • Assume and pay debts assigned to you in the Judgment
  • Pay off outstanding debts and attorney fees

To the extent possible, try to cut any ties between your credit and your ex-spouse’s. This might mean transferring balances to new accounts in your name only. You might also want to use savings to pay off jointly held debts. Otherwise, your ex-spouse’s future financial challenges could result in collections against you.

If your spouse is going to be paying debt in your name, ask your attorney for security, such as being named beneficiary on a life insurance policy in case the spouse dies before the debt is paid.

Insurance and Estate Planning When You are Newly Single

  • Enroll for COBRA, employer-provided, or Healthcare Marketplace health insurance. There are strict time limits for enrolling in COBRA. Get the process started before your judgment is even finalized.
  • Make sure children are properly insured
  • Change your beneficiaries on life insurance policies
  • Update your estate planning documents

After your divorce is final, you may need to set up new health insurance for yourself and/or your children. Be sure to remove your ex-spouse if you were the one providing coverage. A divorce is a qualifying event to change plans even in the middle of the year. Compare the costs of COBRA (continuing on your ex-spouse’s plan at your own expense), the Healthcare Marketplace, and any private insurance. Often, COBRA is far more expensive than simply starting a new policy, but if you have a pre-existing condition, and the coverage is better, it may be worth the money.

It is also important to update your estate plan after the divorce is final. A judgment of divorce does not supersede a trust! Therefore, even if your judgment says an asset is awarded to you, if your trust leaves the asset to your spouse, your ex-spouse will still get the asset despite the divorce. It is absolutely vital to get a new will and trust in place after your divorce, especially if you have minor children.

Our Ann Arbor Family Law Attorneys Are Here to Help

At NSSS&B, we want to help you transition to life after divorce. We know that the entry of a Judgment of Divorce isn’t the end of the process. Our Ann Arbor family law attorneys can help you create a checklist of steps to take after your divorce is final, and assist with the entry of orders, payment of support, and execution of new deeds, making sure everything is taken care of. Click here to schedule a consultation with one of our experienced attorneys.