Unfortunately, for various reasons, marriages do not always work out. Whatever the reason behind a divorce, it is important to think about how your divorce impacts your estate plan.
Divorce and Your Estate Plan: When Should You Update Your Estate Plan?
While you may have a lot on your mind and a lot to deal with legally in regards to your divorce, it is imperative that you do not forget about updating your estate plan. Failing to do so can lead to unwanted consequences down the road, such as if your ex-spouse remains a beneficiary.
To avoid unwanted situations surrounding your estate plan down the road, it is advisable to update your estate plan as soon as possible – before your divorce even becomes finalized. If you do not, your ex-spouse may end up controlling your property and assets – a situation you may not want to happen.
What Type of Estate Planning Documents Should You Update During a Divorce?
As you can tell from above, it is crucial that you take the necessary steps to update your estate plan when going through a divorce. Below are examples of some changes that you should make to your estate plan:
- Change your beneficiaries in your will, trust, life insurance policies and retirement plans
- Change your Power of Attorney documents
- Modify or create a new will
- Modify or create a new trust
Changing Your Beneficiaries in Your Will, Trust, Life Insurance Policies and Retirement Plans: What You Need to Know
You may not want your ex-spouse to be named as a beneficiary in your will, trust, life insurance policy or retirement plan. Simply put, if you do not update these documents, your ex-spouse will inherit what he or she is legally entitled to according to these documents following your death. This is a scenario that may be in your best interest to avoid.
Changing Your Power of Attorney Documents: What You Need to Know
As with your beneficiaries, you will want to update any Power of Attorney documents that you have, such as Medical Power of Attorney and Financial Power of Attorney. If you do not want your ex-spouse making decisions on your behalf should you become unable to do so on your own, it is time to update these when you are going through a divorce.
Modifying or Creating a New Will: What You Need to Know
Your will is another document you should update while going through a divorce. As mentioned above, failing to update your will can result in your ex-spouse inheriting assets or property that you may no longer want them to have upon your passing.
Modifying or Creating a New Trust: What You Need to Know
If you have a trust set up, and especially if your ex-spouse is currently named as successor trustee, you will want to update or create a new trust.
Divorce is never an easy process to go through. With that said, it is important to assure that you do not forget about your estate plan during this time. If you do, the ramifications can be serious.
For assistance updating or creating an estate plan, contact us today to learn about our services and how we can assist you.
For further information regarding various estate planning and elder law topics, view our previous blog posts, newsletters and informative webinar series on our resources page.