Divorce is a life-altering event that not only changes personal relationships but also significantly affects your estate plan. After a divorce, the way assets, beneficiaries, and powers of attorney are handled may need to be revisited. It’s essential to understand how a divorce impacts your estate plan and make the necessary updates to protect your interests.
Beneficiaries and trusts
One vital area to address in a divorce is your beneficiary designations. In many cases, spouses are named as beneficiaries on life insurance policies, retirement accounts, and other financial assets. If you don’t update these after your divorce, your ex-spouse may remain entitled to these assets. Review all beneficiary designations and ensure they reflect your wishes.
Wills and powers of attorney
A divorce often invalidates provisions in your will that benefit your ex-spouse, depending on your jurisdiction. You must revise your will to ensure it no longer names your ex as an executor or trustee, and it’s crucial to update your powers of attorney for healthcare and financial decisions. These documents give someone authority to act on your behalf, and you may want to appoint someone else if you no longer trust your ex.
Asset division and new estate planning
Dividing assets in a divorce might require significant changes to your estate plan. After the division of marital property, you’ll need to consider how to structure your estate to meet your new financial situation. For example, assets you once shared with your ex may now become separately owned, and this can affect how you plan to distribute your estate.
Consider professional advice
Divorce brings many complex legal issues to the forefront, and estate planning is no exception. Working with a family law attorney can help update everything appropriately and accurately as you navigate divorce.