Holiday Hustle Break: The Divorce Money Tune-Up Your Future Self Will Thank You For

Holiday plans are loud; money problems are louder. We press pause on the overwhelm and walk you through a clean, step-by-step year-end checklist designed for life after divorce. From tax withholding to FSAs, investment strategy, and credit safeguards, we focus on the handful of actions that prevent April shocks and set you up for a calmer new year. If you’re rebuilding after divorce and need a focused path to financial stability, this guide gives you practical, timely steps you can complete this week. Subscribe for more smart divorce money insights, share this with someone who needs a calm plan, and leave a review with the top fix you’re tackling today.

• To access the IRS' 2025 w-4 Calculator, Click https://apps.irs.gov/app/tax-withholding-estimator

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Chapters

• 0:00 Welcome And Sponsor Message
• 2:45 Why Year-End Cleanup Matters
• 3:34 Fixing Tax Withholding Post-Divorce
• 6:18 Updating Beneficiaries The Right Way
• 8:18 Don’t Forfeit FSA And Dependent Care
• 9:57 Smart Year-End Investment Moves
• 12:16 Credit Reports, Freezes, And Joint Accounts
• 15:17 Your 20-Minute Money Snapshot
• 17:18 Lightning Round: Five Quick Wins
• 19:27 Closing, Shares, And Free Consult Link

Transcript

SPEAKER_01: 0:08

Welcome to the Divorce Rich Podcast. I'm your host, Jackie Ressler. I've been a certified divorce financial analyst for 28 years, helping clients and their attorneys navigate the often complex and confusing financial issues in divorce. If you're in the process of or considering divorce, now is the time for you to take a deep breath and give yourself permission to find clarity on the financial issues you're facing. Rich means many things to many people. I believe the best definition of being rich is someone who has access to many resources. Along with my guests on this podcast, I will be bringing you a wide variety of information so that you can make sound and informed financial decisions for your financial future.

SPEAKER_03: 1:07

Hey, if you're recently divorced or still in the middle of it, you already know that life can feel like it's been turned upside down. And let's be honest, the financial part, it's overwhelming, confusing, and often the last thing you want to deal with. That's why I want to tell you about the independent wealth management team at Center for Financial Planning. Their team of certified financial planners specializes in helping people just like you navigate life changes with confidence, whether it's assessing your new financial circumstances, creating or updating your retirement plan, or helping you adjust to the new normal. They'll work with you to get a clear, customized plan to feel in control and move forward with confidence. So if you're interested in working with a financial planner who you can trust to have your best interests in mind and you're ready to take the next step, visit centerfinplan.com. That's centerfinplan.com and schedule a conversation. Center for Financial Planning, live your plan.

SPEAKER_00: 2:10

Disclosure. Securities offered through Raymond James Financial Services, Inc., member FENBRA, SIPC. Investment Advisory Services offered through Center for Financial Planning, Inc. Center for Financial Planning Inc. is not a registered broker dealer and is independent of Raymond James Financial Services. Center for Financial Planning was a sponsor of the Divorce Rich Podcast. The Center for Financial Planning and Raymond James are not affiliated with or endorsed by the Divorce Rich Podcast.

SPEAKER_03: 2:45

Hello, friends, and welcome back to the Divorce Rich Podcast, where we talk about smart money moves during and after divorce. I'm your host, Jackie Ressler, and today I'm talking about something that sneaks up on a lot of people. The end-of-year financial cleanup. Most divorced or divorcing clients are juggling kids' schedules, holiday emotions, gift buying, travel plans, and then poof, January hits, and the IRS, the courts, and your financial accounts all go, hi, remember us? The good news, most year-end mistakes are totally avoidable with a quick check-in. So let's block through the big ones and what you can do right now to avoid headaches later. The first mistake is not updating your tax withholding after divorce. We're gonna start off with a biggie, tax withholding. After your divorce, your tax filing status usually changes. Your exemptions change, your income split may change, but what doesn't magically change is your W4. This is where people get in trouble. If you are newly divorced and still withholding like you're married, you might be setting yourself up for an April surprise you do not want. Here's the fix: log into your payroll portal or contact your HR department. Update your filing status from married to either head of household or single. Using the IRS withholding tool. Yes, it's boring, but it is accurate. Make sure that any um additional income that you might be receiving is factored in. And you can actually make that change yourself. And I'm gonna link the IRS portal in the show notes so that you can figure out what your withholding should be. Um many years ago, I had a client who got a surprise tax bill and a huge panic in April. Um because we didn't talk about that. And we didn't talk about the fact that he had been withholding at the incorrect rate for most of the year. And he couldn't have made that simple adjustment and withheld the right amount by the end of the year and not have that big, big tax bill in April. So ever since that has happened to me, I always bring that up with clients. Um the second big mistake is forgetting to update your beneficiaries. This one comes up constantly. So I'm talking about your retirement account beneficiaries, your life insurance beneficiaries, transfer on death beneficiary designations. So many people that are getting divorced assume that the divorce decree automatically removes their ex as a beneficiary. Now, if this is going to vary state by state. In Michigan, I'm taping this in 2025, and that is actually the case. When you get divorced, your divorce does nullify any will and potentially any other kind of estate planning that you've done with your former spouse. However, it's really important that you go in and you check and make sure that all of the beneficiary designations have been updated. I've seen ex-spouses left as beneficiary on 401ks from 10 years earlier. One signature can clean this up, but it gets overlooked because it feels emotional, heavy, or just tedious. So here is the quick fix for this. Take a look, pull out your 401, your beneficiary information, your look at your life insurance policies, your brokerage accounts if you have any transfer on-death accounts, any bank accounts with payable on-death. Put it on your checklist to go in and make sure that you reach out to the custodian or the insurance carrier and make the changes. Put it on your checklist. It matters. A client came to me one time after realizing that her ex was still listed as beneficiary on her retirement account. Now, there had been a quadro that had awarded her ex-spouse half of the 401k account, but she had left the spouse out as beneficiary to the remaining half. It's something that really frequently does get overlooked. And it's a really simple fix. So don't let this happen to you. Mistake number three, losing FSA or dependent care dollars. Flexible spending accounts. And this one hurts every year. Flexible spending accounts are usually use it or lose it. And divorced parents often don't coordinate receipts or child care payments before December 31st. Sometimes one parent thinks they're getting reimbursed for dependent care, but the account is in the other parent's name. This is one of those things that, again, it's a real simple fix. We're I'm we're going to be posting this in December of 2025. What I want you to do is check the remaining flexible spending account, dependent care spending, flexible spending account balances, and submit those receipts before the December 31st cutoff. Coordinate with your ex about who paid what and schedule any medical or dental visits before December 31st if there's money left. This is really important. It may involve some communication between you and your ex that may unfortunately you might not want to have that communication, but this is one of those financial mistakes that you don't want to make by year end.

SPEAKER_02: 8:44

And it's a really easy one to fix. Number four is a big one.

SPEAKER_03: 8:53

Number four, missing year-end investment moves. Divorce often leaves people with a new mix of accounts. Some taxable, some retirement, some inherited, some from the marital estate. But clients rarely rebalance at year end. If your settlement left you without the taxable accounts, a big capital gain, or a portfolio that's lapsided after division, year end is your chance to correct that. Let me give you an example. My client Sarah was awarded 50% of all of the brokerage account assets, and her husband was awarded 50%. Everything was transferred to her in kind, meaning she got half of all of the shares. Now, there was a big capital gain liability on those shares. What that means is that when Sarah was thinking about um liquidating and repositioning her account, she really didn't feel like dealing with the financial advisor that she was going to be working with before December 31st. So she and I happened to have a conversation. And I highly encourage her to make that phone call to her financial advisor and find out before year end if she could have if there were any moves involving her investment accounts that would be beneficial to her. So this year might be one year that you are in a very low tax bracket, let's say. Let's say your only income this year is going to be child support, spousal support, or alimony, which both of which are not treated as taxable income. And maybe you're planning to get back into the workforce as time goes by. This is probably a great year to take advantage of being in a lower bracket and being able to absorb those capital gain taxes at a lower rate. And the extra plus here is that it gives you the opportunity to rebalance at year end into a portfolio that makes sense for your financial goals, not the goals that your spouse had or that you had together as a couple. So scheduling a phone call, scheduling an appointment with your financial advisor to talk through some of these investment allocation fixes before year end is something that I highly recommend everyone to do. Other reasons that you're going to want to touch base with your financial advisor before December 31st, one other item would be asking your tax advisor about tax loss harvesting. And again, if you were really talking here about taking advantage of some of these lower-term, lower um, lower income years, it might be a perfect year for a Roth IRA conversion. Um, so those are again are things that you really need to get that input from your financial advisor and your CPA, hopefully, would coordinate that together, but it's got to be done before December 31st. Mistake number six is not checking your credit report before January. Divorce is the absolute perfect storm for credit mistakes. There might be joint accounts that you thought were closed. There might be authorized users still attached to your credit card accounts. There might be old debts that were paid off, but not updated. If your ex is financially impulsive or disorganized, this is even more crucial. So here's the simple fix. Pull all three credit reports, Experian, Equifax, and Transunion. Maybe consider freezing your credit if there's a problem. Now you don't want to freeze your credit if you're going to be applying for any kind of a credit card or anything that where you're going to need to have your credit run, let's say that you're going to be purchasing a mortgage, getting a mortgage or purchasing a new car and getting a loan. But if you are in a situation where you find out that there's been some activity on your credit report that is not related to you, you may want to consider freezing your credit. If you are legally allowed, you also want to close any joint accounts that are in the name of you and your ex and remove any authorized users on any of your credit accounts. You want to make sure that you check with your judgment of divorce or your settlement agreement, though, and confirm that you're not doing anything that you're not supposed to do. So if your settlement agreement says you have to keep any accounts open, which sometimes people do, they might keep a joint credit card open to pay for children's expenses together or some other expenses. Um then you, of course, you need to follow the judgment of divorce. But if the judgment of divorce says that you are going to receive your credit cards solely for your exclusive use, then you want to make sure that you remove any authorized users that are no longer authorized and close any of those joint accounts again if you're able. I had a client once who found on her credit rating a joint card that her ex was still using. If she hadn't pulled her credit report, she would not have known that. And that would have been a big problem for her. So it's really important to stay on top of that. And end of the year is a perfect time to check in on your credit report and see how it looks and do a quick very um quick check-in. One of one mistake that people make at year end is not doing a quick post-divorce or just money snapshot. Divorce absolutely drains people emotionally and physically and financially. Because of that, they avoid numbers. Year end is a gentle checkpoint for you to say, hey, where am I financially right now? It doesn't have to be a full plan, just a snapshot. So I'm gonna encourage you to spend 20 minutes before December 31st writing down or putting taking some notes on your computer on the following things. What is my income that I can count on every month? What are my recurring fixed expenses every month? What kind of subscriptions do I have that maybe I'm not aware that I'm continuing to pay for every month? Do I have any upcoming big expenses? And what's my cash flow look like for the next 90 days? I had a client, a newly divorced client, who is paying$400 a month in subscriptions she thought her ex was still covering. This is why, again, it's really important that you go through this real brief, quick check-in with yourself. How am I doing? Do I encourage you to do a complete financial plan? Absolutely yes. Does this have to be the complete financial plan, the first year? Maybe it's a few months since your divorce was final. No. But I do, I would encourage you to sit down and just do these few things. Checking what is my income, what are my recurring fixed expenses every month? What subscriptions am I paying for? Do I have any upcoming big expenses? And what does my cash flow look like for the next 90 days? If you can handle that small little bite of looking at your finances, you can handle whatever comes up next. But this is a really good habit to get into at year end. All right, lightning round, five quick wins. If you only do a few things this week, do these. Number one, update all your passwords. Really important. If you've been through a divorce this year and there's any chance at all that your former spouse might have access to any of your logins and passwords, now is a great time for you to sit down and just change them. So again, going through, I know I have a long list of passwords in my phone that's password protected. Um, and a lot of people keep their passwords in different places, but um updating passwords is a really great thing that you can feel good about getting done if you can get that done before year end. Number two, check on all of your auto pays and make sure that they are coming out of the correct accounts. If you've experienced a divorce and your auto pays were coming out of a joint account and the status quo has ended and they need to come out of a new account, you want to make sure that you correct all of those. So another great way to feel really super accomplished by year end is to check into all of your auto pays and make sure that they're coming out of all of the right accounts. Number three, back up all of your divorce documents. So all of the documents that you've been saving throughout your divorce case from your attorney, all the motions, all the filings, the final decree, any quadro documents. Certainly what you want to do is print out a hard copy of all those and keep them in a safe place. And you also might want to back them up. I highly recommend that you back them up to the cloud. You have them on a thumb drive, that there's something that you have documented, that you have all of those critical documents that you do not want to lose backed up somewhere. Number four, just make a quick phone call or email and schedule your tax preparation meeting. Get that done before year-end. And last but not least, send a friendly but clear message in your co-parenting app about year-end reimbursements between you and your co-parent on things that you agreed you would have a true-up at the end of the year. Well, the end of the year is in sight. And now is a great time to send a message to your ex-spouse or your co-parent about year-end reimbursements and true-ups. Okay, well, you have survived the emotional side of divorce. Now you get to rebuild your financial stability with clarity and confidence, and the year-end cleanup is such a powerful way to do that. If this episode helped you, share it with someone who's juggling the holiday chaos and just deserves a little financial peace of mind. And if you have your own end-of-year questions or want me to cover something specific on the show, please send me a message, tag me on social media. Until next time, stay divorce rich.

SPEAKER_01: 19:48

We all agree, divorce is emotional, but your financial decisions shouldn't be. I'm Jackie Restler, certified divorce financial analyst.

SPEAKER_03: 19:58

On this podcast, I help you make smart and formal choices about money during divorce so you can move forward with clarity and confidence. Not sure where to start? Let's talk. Schedule a free 30-minute consultation with me to see if divorce financial planning is the right fit for you. At the end of this episode, you can check out my show notes. There's a link for you to sign up for a free 30-minute consultation. Because financial peace of mind is possible.

SPEAKER_01: 20:34

Thank you so much for taking time out of your day to listen to Divorce Rich Podcast. If you like this podcast, please follow us on Apple or anywhere that you download podcasts and share this link with any friends or family that you think might benefit from this information.