Divorce affects nearly every part of your financial life. A strong support network of trusted loved ones, experienced legal counsel, and informed financial guidance can help you move forward with clarity and confidence. Jane LaLonde is a Certified Divorce Financial Analyst® (CDFA®) who helps clients evaluate options, model cash flow and taxes, and avoid unintended consequences due to dividing assets.
Begin with an organized financial inventory
List marital and separate assets, retirement accounts, real estate, business interests, bank and brokerage accounts, life insurance, and personal property. Include all debts, both shared and individual. A detailed inventory supports equitable negotiations and reduces the chance of surprises later.
For taxable assets, keep documents regarding the initial purchase price (cost basis) of the asset if possible. This information may be critical for future tax obligations.
Know how accounts are divided in practice
- IRAs: IRAs can be split using a transfer incident to divorce, if directed by the decree or marital settlement agreement. Handled correctly, this preserves tax‑deferred status and avoids current tax.
- 401(k)s and most employer plans: A Qualified Domestic Relations Order (QDRO) is required. A QDRO instructs the plan to pay a portion to the divorced spouse.
Your divorce decree or settlement will specify how accounts are to be split, but you still need to coordinate paperwork and beneficiary updates. An experienced financial professional can help with sequencing, paperwork, and beneficiary updates to prevent taxation or administrative errors.
Understand tax treatment and cash flow changes
- Capital gains and basis: If assets like a taxable brokerage account or real estate are divided, be sure to track cost basis, holding periods, and depreciation history to avoid unexpected capital gains later.
- Budget and emergency reserves: Your post-divorce budget may look substantially different. Plan for cash needs, debt payments, and near‑term taxes while saving for any goals or emergencies.
Health insurance and benefits
Divorce triggers special rules for continuing coverage. Under COBRA, a former spouse may retain group health coverage for a limited period, but must enroll within specific time frames. Compare your options, including COBRA, Affordable Care Act, or your own employer.
Social Security and longer‑term planning
Your eligibility for your spouse’s Social Security benefit will depend on several factors: how long you were married, if you re-marry, and each of your ages. Understanding these rules can inform decisions about timing and coordination with your own benefit.
Common logistics to address after the decree
- Update beneficiaries on retirement accounts, life insurance, and any individual accounts. Your divorce decree may specify requirements around beneficiary designations.
- If your divorce decree instructs you to do so, close or retitle joint accounts and credit lines.
- Create or update your estate plan and powers of attorney.
- Review tax withholding and estimated payments to reflect the new filing status.
- Re‑evaluate investment strategy, risk tolerance, and time horizon to match new goals.
Where a CDFA can help
A CDFA can model settlement options, including home buyouts, pension valuations, after‑tax divisions of portfolios, and the long‑term impact of separated assets. Integrating taxes, healthcare costs, college planning, and retirement readiness helps avoid choices that feel sensible now but strain future cash flow.
This material is for educational purposes and is not tax or legal advice. Please consult your attorney and tax advisor.
Contact Us
If you are preparing for or navigating a divorce and would like guidance, we encourage you to schedule a meeting.
Contact Fiona Morina, Administrative Assistant for Jane M. LaLonde, CFP®*, at 612.431.7509 or Fiona@LWAG.com.
Office: 2701 University Ave SE, Minneapolis, MN 55414.