I was asked recently by a financial advisor in New York, to review and comment on a chart he had put together which was designed to help newly-divorced people in get back on their feet.  The draft document I received covered mostly investment matters, but it got me thinking about all of the practical things people need to think about – and do – when they transition from being a married couple, to being single.  So, in no particular order of importance (in my view, they are all important, or will be at some point) here are some basic things which need to be attended to after a divorce.

Retirement Money Transfers:  Often, a settlement agreement or court decision will call for retirement money to be transferred between parties.  These transfers must be made between retirement accounts in order to avoid taxes and penalties.  Where the account in question is a simple IRA, or a Roth IRA, a call, and a copy of the order or agreement to the fund administrator is usually enough to have the transfer made.  For more complex plans, “qualified plans” as they are known, a Qualified Domestic Relations Order (more commonly known as a QDRO) is needed.  A QDRO is an order, prepared either by an attorney or a pension expert, and presented to the matrimonial judge for signature.  Once signed, the order is forwarded to the plan administrator, and the money is transferred tax free into a retirement account designated by the recipient. Read more ›