Any time you have a major life change, it’s wise to review and revise your estate plan. A divorce certainly fits that criteria. If you’ve split from your spouse and want to make sure that your estate plan is indicative of your current situation (and your priorities), we’d recommend taking some time to sit down with an estate planning attorney ASAP.
In the meantime, here are some specific estate planning issues you might address in the wake of a divorce.
Following a divorce, you may still have certain financial obligations to your spouse—and you may be on the hook for those obligations even in the event of your death. Your estate planning lawyer can help you plan accordingly, but only if you provide him or her with a copy of your divorce agreement.
It’s not uncommon to establish your spouse as a healthcare proxy—someone who can legally make your medical decisions for you in the event of incapacitation. If you get divorced from that spouse, however, you may not want him or her to make those decisions. Ensure that you update this in your estate plan.
Along similar lines, your Power of Attorney denotes the person who can make legal and financial decisions for you if you become incapacitated. Here again, it’s customary to name a spouse—but in the event of a divorce, you may want to rethink things!
Does your will name your ex-husband or ex-wife as the executor of your estate? And do you have a trust with your ex-spouse appointed as a trustee? You may decide to update these key personnel. Speak with your estate planning attorney about making these changes official.
If you have minor children, you’ll need to make sure you clarify who you wish to serve as their guardian when you die. Most of the time, it’s best to allow your ex-spouse to be the guardian—and in most cases this is the legal default anyway. However, if you had an especially brutal divorce or if you know your ex to have serious problems with drugs, alcohol, or abusive behavior, you should talk to your estate planning attorney about alternative guardianship options.
Believe it or not, the terms of your divorce may have implications for your life insurance. Specifically, you may be required by the courts to maintain a life insurance policy, perhaps even to keep your ex listed as the beneficiary of that plan. This is definitely something we recommend you review with your estate planning lawyer.
Finally, take note of who you have listed as a beneficiary for your IRA, 401(k), and other retirement assets. If it’s your ex-spouse, you may wish to change those designations—but doing so will require you to formally name new beneficiaries in your estate plan. This is something that may be prohibited by your divorce agreement, so make sure you consult with your lawyer.
The bottom line? You should be in the habit of reviewing your estate plan at least once a year or so, and also in the wake of any big life events. Divorce is high on that list. If you’re newly divorced, take some time to talk over the estate planning implications with one of our attorneys. Reach out to Singh Law Firm to make an appointment with one of our estate planning pros!