How Divorce Affects Year-End Finances & Taxes

1. “WHAT KIND OF PROFESSIONAL FINANICAL HELP SHOULD BE ENLISTED DURING THE DIVORCE PROCESS? WHO SHOULD A PERSON GETTING DIVORCED LOOK TO HIRE?”

Enlist the help of professionals – you don’t have to go it alone. A divorce attorney, an accountant, your financial advisor- cool heads who’ve seen it all before – can help you develop a plan, maintain perspective, and move forward with confidence.

2. “WHAT SHOULD SOMEONE DO IF THEY ARE GETTING DIVORCED, BUT SHARE FINANCIAL AND OTHER SORTS OF ACCOUNTS WITH THE PERSON THEY ARE DIVORCING? WHAT ARE THE SPECIFIC STEPS THEY SHOULD TAKE?”

Close all joint accounts immediately. Open new checking, savings and credit accounts in your name only – and close any that are held jointly. You’ll also want to take your name off joint bills and utilities, a process that can take longer than you might expect. Get a copy of your credit report to make sure you and your ex are no longer on each other’s accounts.

3. “WHAT WILL HAPPEN TO ALL THE ASSETS THAT A DIVORCED COUPLE HAVE IN COMMON? AND JOINT LIABILITIES? WHAT WILL HAPPEN TO THOSE, WHAT SHOULD SOMEONE DO?”

Inventory your assets – and your debts. You’ll want to split your assets (stocks, bonds, real estate, art, collectibles, etc.) fairly, based on your needs and expectations as well as state law. If you’re in a community property state, the split is generally 50/50. And don’t forget about your joint debt (mortgages, personal loans, credit cards, utility bills, etc.) all of which will have to be accounted for in the divorce agreement.

4.“WHAT SHOULD SOMEONE DO IF THEIR SPOUSE HOLDS MOST OF THE RETIREMENT ASSETS, AS THEY HAVE BEEN THE PRIMARY WORKER IN THE FAMILY? WHAT OPTIONS DOES THE NON-WORKING SPOUSE HAVE?”

Don’t forget your retirement accounts! Talk to an attorney and tax professional about the best way to divide IRAs, 401(k)s and pensions. And get going right away on the qualified domestic relations order (QDRO) that’s needed for many retirement assets. It can take months to complete, even if everyone is on the same page.

5. “WHAT SHOULD A SOON-TO-BE DIVORCED COUPLE DO ABOUT THEIR JOINTLY OWNED HOME?

If you own a home, think carefully about what to do with it – set aside any emotional attachment to your home and think practically. Ask yourself: Can I afford to keep it on my own, or would selling it be more likely to help me achieve financial stability and move on with my life? Get an appraisal.

6. “WHAT GUIDANCE DO YOU HAVE FOR A PERSON TO APPROACH INCOME ON THEIR OWN? WHAT KIND OF BUDGETING GUIDANCE DO YOU HAVE FOR SOMEONE WHO IS NEWLY-DIVORCED?”

Calculate your income needs – and create a new budget. You can’t figure out how much income you’ll need if you don’t know how much you spend now, so look at your current budget and think about your future plans. Talk with a financial advisor about any adjustments you might need to make in how you spend, save and invest for your future.

About the Author

Angela J. Crosher isn’t just a Merrill Financial Advisor—she’s a strategist who helps clients navigate their financial landscape with clarity, purpose and care, crafting plans that feel as personal as they are powerful. Her mission is to make finance simple, approachable, and empowering, helping turn financial uncertainty into confidence with clear, supportive, and practical strategies that fit real life, helping to achieve financial freedom.

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