Going through a divorce is never easy. It can impact just about every part of your life. Even if your divorce is completely amicable, there are always issues that can arise. Although finding a new home, determining child custody and support and coping emotionally with being single again can take their toll, it’s important to update your estate plan. You should also do so sooner rather than later because waiting can bring about considerable financial consequences. In general, there are three chief elements of an estate plan on which you should focus.
Last Will and Testament
Many people wrongfully assume that a divorce instantly negates a Last Will and Testament. Although some states have certain provisions that prevent former spouses from inheriting, the only way to absolutely ensure that your ex does not receive an inheritance is to revoke your previous will and create a new one in its place. Keep in mind that in your new will, you must address exactly who should receive what and name someone as an executor.
If your marriage resulted in children, it’s also important to name a legal guardian. In most instances, your former spouse will get sole custody unless the court determines that he or she is unfit. If you feel that your ex is unfit, include a memorandum to your will that explains your reasoning. While the court isn’t required to comply with your recommendation, your wishes are taken into consideration. Discuss issues such as this with your estate planning lawyer.
Beneficiary Designations on Retirement Accounts and Life Insurance Policies
Other items to be updated after a divorce are beneficiary designations on retirement accounts and life insurance policies. This is because anything in your 401(k) or IRA as well as your life insurance policy supersedes any changes you make in your will.
Powers of Attorney
It is common to include powers of attorney in an estate plan. A power of attorney is documentation that designates a person or entity the right to manage your affairs and finances and make decisions about your medical care if you become unable to do so yourself if you become incapacitated. Many people name their spouse, but if you get divorced, you will probably want someone else to act as your power of attorney, such as a child or other close relative. It’s wise to discuss changing this information either during the proceedings of your divorce or after your divorce is already finalized.
Other Things to Consider
In addition, after your divorce, you may want to talk to family members and discuss possibly reviewing their own estate plans in case your former spouse may be listed as a beneficiary.
It’s important to note that having your former spouse removed from some or all parts of your estate plan can be a complex process. To go about changing your estate plan in the quickest and easiest way possible, it’s a good idea to have a skilled estate planning attorney working to help you.
