Divorce marks a significant life transition, one that requires careful attention to various aspects of your life, including your estate plan. While dividing assets and agreeing on custody arrangements are immediate concerns, updating your estate plan is an essential step that ensures your wishes are honored and your assets are protected in the future. Here’s why and how you should revise your estate plan following a divorce.
Why Updating Your Estate Plan Is Critical
Remove Your Ex-Spouse as a Beneficiary
In many cases, an estate plan created during marriage names the spouse as the primary beneficiary. After a divorce, leaving your ex-spouse as a beneficiary might result in unintended consequences, including them inheriting assets you no longer wish them to have.
Revisit Guardianship Provisions for Minor Children
If you have children, your estate plan likely includes guardianship provisions. While courts usually favor the other parent in custody matters, it’s important to designate a secondary guardian in case your ex-spouse becomes unable or unwilling to care for your children.
Ensure Proper Asset Distribution
Divorce often changes your financial situation and the assets you hold. Updating your estate plan ensures your revised assets are distributed according to your current wishes.
Revise Your Powers of Attorney
If your ex-spouse is listed as your financial or healthcare power of attorney, you’ll want to replace them with someone you trust to act in your best interests.
Steps to Update Your Estate Plan
- Create a New Will
Your will dictates how your assets will be distributed after your death. In addition to removing your ex-spouse as a beneficiary, you may want to update other provisions, such as who will serve as executor or trustee for your estate.
- Update Your Trusts
If you have a trust in place, ensure that your ex-spouse is no longer listed as a beneficiary or trustee unless you wish to keep them in that role. Consider creating a new trust if the existing one no longer aligns with your goals.
- Modify Your Beneficiary Designations
Certain accounts, like life insurance policies, retirement accounts, and payable-on-death bank accounts, bypass the terms of a will and go directly to the named beneficiary. Contact your financial institutions to update these designations.
- Revise Healthcare and Financial Powers of Attorney
Your power of attorney documents give someone authority over your medical and financial decisions if you’re unable to make them. Ensure this role is assigned to a trusted friend or family member.
- Consult with an Experienced Estate Planning Attorney
Estate laws can vary significantly by state, and the nuances of your divorce settlement might impact your estate plan. An experienced attorney can guide you through the process and ensure your documents are legally sound.
A Proactive Approach for Peace of Mind
Updating your estate plan after a divorce may not be at the top of your to-do list, but it is an essential step in securing your future. It not only protects your assets but also ensures that your legacy reflects your current wishes.
At Billian Law, we specialize in estate planning tailored to your unique circumstances. Contact us today to schedule a consultation and take the next step in securing your peace of mind after divorce.
