Unfuck my finances: extreme anxiety edition
October 29, 2022 8:59 AM Subscribe
I have been procrastinating some VERY important financial housekeeping for five years. Can someone please break the process down for me step by step because I literally cannot bear to think about it? Details within, pls and thx.
Confession time: I have not completed a big part of my post-divorce financial separation. Specifically, I have not completed the QDRO process to split retirement accounts per the divorce agreement. It has been five years. I am so ashamed at this point I can barely think about it, let alone do anything to fix it. Plus on my own I also have 401k accounts and hsa accounts from old jobs that need to be made sense of and corralled into coherence.
One of my anxieties is about touching the big pile of papers which contain all the account information. I might need someone to find & gather (request from bank if necessary) all the paperwork for all my accounts & go through the stack of old paperwork I have to find my ex's account information too, do [handwavey process of financial wizardry] and just present me with a bunch of things to sign, BAM, my money is all sorted into like 3-4 consolidated buckets instead of being all over the fucking place.
Is that possible?
I know I will eventually need a lawyer for some final steps on the QDRO but I want the prep work fully finished before I go to the lawyer. There has to be some sort of a financial coach? accountant? investment advisor? money witch? freelance personal paperwork genius? who has knowledge of post-divorce finances, and who is willing to do legwork too?? And who is *a lot* more affordable than my $450-an-hour lawyer?
That's where I am stuck. I don't even know who or what type of professional I need. And if I am blowing this task completely out of proportion due to my anxiety, and you think it's reasonable that I could do it all myself in a few hours (I'm quite competent at life generally I guess) could someone break it down step by step for me just to get me over the terror of not knowing what I'd be getting myself into?
Thanks ❤️
Confession time: I have not completed a big part of my post-divorce financial separation. Specifically, I have not completed the QDRO process to split retirement accounts per the divorce agreement. It has been five years. I am so ashamed at this point I can barely think about it, let alone do anything to fix it. Plus on my own I also have 401k accounts and hsa accounts from old jobs that need to be made sense of and corralled into coherence.
One of my anxieties is about touching the big pile of papers which contain all the account information. I might need someone to find & gather (request from bank if necessary) all the paperwork for all my accounts & go through the stack of old paperwork I have to find my ex's account information too, do [handwavey process of financial wizardry] and just present me with a bunch of things to sign, BAM, my money is all sorted into like 3-4 consolidated buckets instead of being all over the fucking place.
Is that possible?
I know I will eventually need a lawyer for some final steps on the QDRO but I want the prep work fully finished before I go to the lawyer. There has to be some sort of a financial coach? accountant? investment advisor? money witch? freelance personal paperwork genius? who has knowledge of post-divorce finances, and who is willing to do legwork too?? And who is *a lot* more affordable than my $450-an-hour lawyer?
That's where I am stuck. I don't even know who or what type of professional I need. And if I am blowing this task completely out of proportion due to my anxiety, and you think it's reasonable that I could do it all myself in a few hours (I'm quite competent at life generally I guess) could someone break it down step by step for me just to get me over the terror of not knowing what I'd be getting myself into?
Thanks ❤️
Organizing and synthesizing the information contained in financial paperwork to accomplish finance-related legal processes is classic accountant. Look for an accountant with experience in family law matters, and ask them if they've helped carry out the specific process of splitting retirement accounts before.
You may or may not require another step of lawyer after that to get to 'things to sign'. You don't need to have that part planned before you talk to the accountant. The accountant can organize your finances without a lawyer involved to finish the process.
Lawyers are very much more expensive than accountants, and it may be best to approach a lawyer with more organized information. This may not require any special or more experienced family lawyer, as it's a standard process that happens in many family law matters. All good family lawyers are strong on finances. But you might not need one of your agreement already clearly spells out what financial process needs to happen. This is not legal advice though, and you will have to consider that once the financial picture is clear.
Don't worry about any sense of shame or embarrassment related to handing this stuff over to the accountant. They've certainly seen worse, and it's a normal part of their job.
posted by lookoutbelow at 9:26 AM on October 29, 2022 [2 favorites]
You may or may not require another step of lawyer after that to get to 'things to sign'. You don't need to have that part planned before you talk to the accountant. The accountant can organize your finances without a lawyer involved to finish the process.
Lawyers are very much more expensive than accountants, and it may be best to approach a lawyer with more organized information. This may not require any special or more experienced family lawyer, as it's a standard process that happens in many family law matters. All good family lawyers are strong on finances. But you might not need one of your agreement already clearly spells out what financial process needs to happen. This is not legal advice though, and you will have to consider that once the financial picture is clear.
Don't worry about any sense of shame or embarrassment related to handing this stuff over to the accountant. They've certainly seen worse, and it's a normal part of their job.
posted by lookoutbelow at 9:26 AM on October 29, 2022 [2 favorites]
Re: shame. I have done 4 years' of tax returns at a time, because Stuff Happened. No one batted an eye, and I got money back. This is extremely common, especially because it's connected to divorce, which is generally unpleasant, if not terribly painful. Find somebody who will help you gather the required information; this could be a tax preparer, professional organizer, friend. Having someone come to your home will help. Then, CPA or divorce attorney.
Re: old 401K accounts. I actually benefited substantially from an old account when it was moved from 1 type of plan to another and I became fully vested. It was well managed and survived the Bigass Recession better than most. It's a good idea to round up all the accounts and pay attention, but no shame in not merging them. It's easier to keep track of fewer accounts, so eventually, not a bad idea to consolidate.
Getting the divorce stuff done will really feel better. Good luck.
posted by theora55 at 9:29 AM on October 29, 2022 [14 favorites]
Re: old 401K accounts. I actually benefited substantially from an old account when it was moved from 1 type of plan to another and I became fully vested. It was well managed and survived the Bigass Recession better than most. It's a good idea to round up all the accounts and pay attention, but no shame in not merging them. It's easier to keep track of fewer accounts, so eventually, not a bad idea to consolidate.
Getting the divorce stuff done will really feel better. Good luck.
posted by theora55 at 9:29 AM on October 29, 2022 [14 favorites]
You already have a lawyer, yes? I'm assuming they specialize in family law? Email them and ask for a recommendation. They will almost certainly know an accountant who can handle this kind of work. However, note that you'll probably have to go through a few preliminary rounds with the accountant--the bank's not going to give them your financial information based on their own say-so alone, of course.
There is nothing to be ashamed about here. Finances are intimidating enough; entangle them with the dissolution of a family, and it's...just a lot. Are you hurting anyone? Have you been draining others to compensate for not dealing with this? I seriously doubt it. So no shame. However, I'm not sure if there is any kind of time limit on getting through the QDRO process, so it's good you want to tackle it now.
posted by praemunire at 9:56 AM on October 29, 2022 [1 favorite]
There is nothing to be ashamed about here. Finances are intimidating enough; entangle them with the dissolution of a family, and it's...just a lot. Are you hurting anyone? Have you been draining others to compensate for not dealing with this? I seriously doubt it. So no shame. However, I'm not sure if there is any kind of time limit on getting through the QDRO process, so it's good you want to tackle it now.
posted by praemunire at 9:56 AM on October 29, 2022 [1 favorite]
Best answer: A virtual assistant could help with the initial step of inventorying what you already have and making initial calls to gather more info. I can recommend Aim2Assist.
posted by brainwane at 3:39 PM on October 29, 2022
posted by brainwane at 3:39 PM on October 29, 2022
Best answer: Find a local divorce lawyer with a CPA on staff. Toss them money (usually at the CPA's rate and not the lawyer's rate) and let them figure it out. Do not attempt to do this yourself. Failure to do so will result in some nasty tax implications. The separation agreement should already spell out exactly how much should have been transferred from your account(s) to the ex's. The potentially complicated part is having the respective financial institutions then split the account at the separation date and thus any gains/losses from that amount post the separation date should go with it.
The QDRO was the most expensive part of my divorce. It cost me $500 (a decade ago) to have them file the paperwork and setup the transfer from my 401k to my ex. (Otherwise the legal side of the divorce cost $260. I went pro-se to save $40-80k in legal fees between me and the ex, but only because I knew exactly where all of the money was and a local law firm published a step by step guide on their website for how to fill out and file the paperwork for my particular judicial district. Things were further simplified since I lived in a no-fault state so it did not matter what the ex did and she did not want custody of the kids. )
posted by SegFaultCoreDump at 4:37 PM on October 29, 2022
The QDRO was the most expensive part of my divorce. It cost me $500 (a decade ago) to have them file the paperwork and setup the transfer from my 401k to my ex. (Otherwise the legal side of the divorce cost $260. I went pro-se to save $40-80k in legal fees between me and the ex, but only because I knew exactly where all of the money was and a local law firm published a step by step guide on their website for how to fill out and file the paperwork for my particular judicial district. Things were further simplified since I lived in a no-fault state so it did not matter what the ex did and she did not want custody of the kids. )
posted by SegFaultCoreDump at 4:37 PM on October 29, 2022
I think that a financial services company like Fidelity or Vanguard can help you consolidate all your old 401k accounts into a single account. They might be able to help you with the qdro as well (or at least be a destination for the retirement dollars from the qdro).
You’ll probably need to work with your attorney to execute the qdro.
I’m not sure that an accountant can help directly with any of these issues, although an accountant or financial plannermay be worth consulting anyway as you straight this out.
posted by u2604ab at 8:08 PM on October 29, 2022
You’ll probably need to work with your attorney to execute the qdro.
I’m not sure that an accountant can help directly with any of these issues, although an accountant or financial plannermay be worth consulting anyway as you straight this out.
posted by u2604ab at 8:08 PM on October 29, 2022
Best answer: When I got divorced, our lawyers agreed to have the QDRO prepared by a third party - a lawyer who specializes in preparing QDROs. It cost a few thousand dollars. After we retained them, they asked for all the information that was necessary to make the calculation and then gave us the QDRO. I'm not sure why an accountant would be necessary. The QDRO people made this magical spreadsheet and did all the work of dividing things into buckets. So, if it were me, as praemunire recommended, ask your lawyer... Then let the QDRO person do their job and give them the information that you have. This was one of the easy parts. Besides collecting all the statements, that was kind of a pain, but there was no math/prep work that I needed to do.
posted by skunk pig at 12:04 AM on October 30, 2022
posted by skunk pig at 12:04 AM on October 30, 2022
Best answer: To address just this piece "Plus on my own I also have 401k accounts and hsa accounts from old jobs that need to be made sense of and corralled into coherence." I put this off for YEARS AND YEARS and finally had my husband sit next to me while I made the calls. It was SHOCKINGLY EASY. Here are my steps:
1. Decide what you want the end-game to look like. Do you have a current 401k you want to roll into? A current HSA? Or do you want to cash out the old things (and prob pay a small penalty but .... oh the relief)?
1a. If there is a 401k you want to roll into, send a quick email to HR asking for the details. No need to go digging for that.
1b. If you want to cash out, grab your checkbook. You may have to provide routing numbers or something.
Now you're ready.
2. Look through the giant pile for logos of your 401k or HSA investment companies. Put those all in a pile each. You don't need to understand or react to any numbers or details on those pages.
3. Pick up one 401k paper. Find the account number and circle it. Find the phone number and call it. Tell whomever answers the phone that you want to close this account and (a) roll into another account (b) cash out. They don't know you, you don't know them, they deal with this request all. the. time. Answer any questions. You may have to sign something or confirm via email.
4. Repeat.
The key with a backlog like this, I've found, is not to try to maximize your return. Just get rid of the account, either by (a) rolling into a current account or (b) cashing out. Don't sweat the $25 transfer fee etc. You may have to pay a procrastinator's tax but it's all money that you didn't have access to before. Just do it.
posted by nkknkk at 8:19 AM on October 30, 2022 [1 favorite]
1. Decide what you want the end-game to look like. Do you have a current 401k you want to roll into? A current HSA? Or do you want to cash out the old things (and prob pay a small penalty but .... oh the relief)?
1a. If there is a 401k you want to roll into, send a quick email to HR asking for the details. No need to go digging for that.
1b. If you want to cash out, grab your checkbook. You may have to provide routing numbers or something.
Now you're ready.
2. Look through the giant pile for logos of your 401k or HSA investment companies. Put those all in a pile each. You don't need to understand or react to any numbers or details on those pages.
3. Pick up one 401k paper. Find the account number and circle it. Find the phone number and call it. Tell whomever answers the phone that you want to close this account and (a) roll into another account (b) cash out. They don't know you, you don't know them, they deal with this request all. the. time. Answer any questions. You may have to sign something or confirm via email.
4. Repeat.
The key with a backlog like this, I've found, is not to try to maximize your return. Just get rid of the account, either by (a) rolling into a current account or (b) cashing out. Don't sweat the $25 transfer fee etc. You may have to pay a procrastinator's tax but it's all money that you didn't have access to before. Just do it.
posted by nkknkk at 8:19 AM on October 30, 2022 [1 favorite]
Reassuring words: this is not that big a deal in the grand scheme of All The Things People Avoid, and it is absolutely a problem that will just go away when you find the right person to help and throw a little money around to pay for their labour and cover any late fees you may have incurred. I once let my taxes sleep for like 6 years and it was only a couple weeks' worth of untangling by an accountant, and a few thousand dollars, to solve it all. I didn't really have the money to spare but the relief made up for the tight belt!
posted by nouvelle-personne at 11:05 AM on October 30, 2022 [1 favorite]
posted by nouvelle-personne at 11:05 AM on October 30, 2022 [1 favorite]
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Lawyer, second stop. Start looking now for the right one. Family law lawyers, would be a decent place to start, given the post-divorce situation. But, you want someone with more "financials" than I think you would get from a standard "family law" lawyer. Put out feelers, ask for recommendations, find a lawyer who ticks all the boxes.
When the CPA is done, and you have picked a lawyer, you are ready to rock and roll. Give the lawyer the CPA info.
Now, consolidating into three or four buckets? The CPA and/or the lawyer will have likely given good ideas.
So... (other than finding the CPA and the lawyer), all of the stressful shit will be being dealt with, by other people, who are professionals at it. Deep Breath.......
It will cost you some for those professional's time. But, if you have money all over the place, and post-divorce assets, it will totally be worth it. You will get your financial shit in order, and the burden of it hanging around will be gone. Win-Win. You got this
posted by Windopaene at 9:19 AM on October 29, 2022 [9 favorites]