Preparing for Year-End During Divorce: A Comprehensive Checklist for 2024

Navigating a separation or divorce can be particularly challenging as the year comes to a close. As you prepare for the end of the year, it’s essential to focus on key issues that could have lasting effects on your finances, family dynamics, and legal standing. While each divorce is unique, addressing these common areas will help ensure that you’re ready for the transition into the new year. Here’s an updated checklist to guide you through the process.

1. Establishing Holiday Custody Arrangements

If children are involved, creating a clear custody schedule for the holiday season is critical. Even if you haven’t finalized your divorce settlement, negotiating a temporary custody arrangement for the winter and holiday season can provide stability and reduce stress for both you and your children. Keep the following in mind:

• Split holiday time: Agree on a fair division of holidays, such as Christmas Eve with one parent and Christmas Day with the other.
• Consider children’s best interests: Prioritize your children’s well-being over personal preferences. Flexible arrangements may be necessary if travel or family gatherings are involved.
• Documentation: If possible, put the holiday schedule in writing to avoid disputes and ensure both parties are on the same page.

2. Reviewing Health and Property Insurance Post-Divorce

Health and property insurance changes are significant when going through a divorce, and year-end can be an ideal time to review your coverage needs:

• Health Insurance: You are no longer eligible for coverage under your spouse’s plan once the divorce is finalized. If you are still covered during the separation, consider:
  • COBRA: You may be eligible for temporary COBRA coverage from your spouse’s employer, though it can be expensive.
  • Marketplace Plans: Review health insurance options through federal or state marketplaces. Make sure to choose a plan that fits your new financial situation.
  • Tax Credits: Consider any eligibility for healthcare tax credits based on your new income level.
• Property Insurance: As assets are divided, ensure that any property you retain, such as your home, is properly insured. If you’re entitled to receive property, confirm that it is adequately covered by the responsible party during the transition period.

3. Updating Financial Plans for Post-Divorce Life

Divorce often brings significant changes to your financial outlook. Planning ahead for the upcoming year can help prevent financial hardship:

• Create a Budget: Outline your anticipated income and expenses post-divorce. This will be especially important if you’re adjusting to new financial obligations, such as child support, alimony, or living on a single income.
• Review Investments and Accounts: Update any joint financial accounts and investments to reflect your new status. Work with a financial planner to restructure your investments based on your divorce settlement.
• Update Beneficiaries: Ensure that the beneficiaries of your retirement accounts, life insurance, and estate planning documents are updated to reflect your new situation.

4. Tax Considerations for Divorce in 2024

As you approach the end of the year, tax planning is essential, especially during a divorce. The decisions you make now could have a lasting impact on your finances:

• Determine Tax Filing Status: Your marital status as of December 31st will dictate your filing status for the year. Options include filing as:
  • Married Filing Jointly or Separately (if the divorce is not final).
  • Single or Head of Household (if the divorce is finalized by year-end). Work with a tax advisor to understand the best filing status for your situation and the tax implications of each choice.
• Child Tax Credits and Claims: Decide which parent will claim the children for tax purposes. Make sure this is clearly outlined in your separation agreement. The parent who claims the children is generally eligible for:
  • Child tax credits.
  • The earned income tax credit (EITC), if applicable.
  • Other credits such as dependent care and education credits.
  • Shared expenses, like mortgage payments and medical bills, should also be discussed in terms of tax liability.
• Spousal Support Tax Considerations: Keep in mind that spousal support (alimony) is no longer tax-deductible for the paying spouse or considered taxable income for the receiving spouse, following changes in the tax law. Ensure this is factored into your settlement and year-end planning.

5. Legal Documents and Estate Planning

As your marital status changes, your estate planning documents and legal directives may need to be updated:

• Update or Create a Will: Ensure that your will reflects your new situation and excludes your ex-spouse from inheritance, if applicable.
• Power of Attorney and Healthcare Directives: Update powers of attorney and healthcare proxies to appoint someone else to make financial and medical decisions on your behalf if needed.

6. Seeking Legal and Financial Guidance

Divorce can be a complex process, especially as you approach the end of the year. Consulting with both a family law attorney and a financial planner can ensure that you are making sound decisions that protect your interests moving forward. At Hopper Cummings, we are committed to providing tailored legal advice based on over 30 years of experience in family law. Whether you’re navigating child custody, property division, or financial settlements, we can guide you through every aspect of the process.

Contact Hopper Cummings for Experienced Family Law Guidance If you are facing year-end divorce considerations or need help with any family law matter, we’re here to assist you. For a confidential consultation, contact us by clicking the connect button on this page or by calling 919-533-4115. We look forward to helping you move forward with confidence.