Divorce is yet another tragedy that can affect families, as well as their estate plans.
Making the difficult decision to go your separate ways is only the first of many difficult decisions to follow.
It is important not to overlook your estate plan during a divorce, as many people going through a divorce would not want to leave part of their estate to their ex-spouse, or have them make any kind of health decision for you on your deathbed.
Here are some of the items you will need to keep in mind for your estate plan after your divorce.
Will/Living Trust: If you do not update your will or living trust, then your ex-spouse may still inherit from your estate. Should your ex-spouse then remarry, your assets could go to the new spouse, who could disinherit your own children. Equally important is naming a guardian for your children in your will.
Beneficiary Designations: Review documents such as life insurance policies, investment accounts, and bank accounts to see if your spouse is still listed as a beneficiary. Assets such as investment accounts and bank accounts are not controlled by your will or trust; instead, they are paid directly to the person listed as your beneficiary. For the sake of your children and any assets you may have allocated to them, it will be beneficial to name your new trust (see above) as a beneficiary in the case of your death, so that your ex-spouse cannot take advantage of and misuse the money you have allocated for the care of your children.
Advance Health Care Directives (aka Health Care Powers of Attorney & Living Wills): Advance Health Care Directives/Health Care Powers of Attorney & Living Wills are documents that let you name someone to make your medical decisions if you are incapacitated. Most married couples have their spouse listed as their agent in these documents. After divorce, you may want to consider nominating new agents for these powers.
Financial Powers of Attorney: Much like advance health care directives/health care powers of attorney & living wills, financial powers of attorney allow married couples access to financial accounts in their individual names without interruption. Oftentimes, these powers can be quite broad, giving your ex-spouse power you may not want them to have. As seen above, after divorce, you may want to consider nominating new agents for these powers.
Although after a divorce you may feel as though you’ve dealt with enough attorneys to last a lifetime, it is important to meet with your estate planning attorney to make sure your estate is in order.