Divorce can be traumatic for the whole family. Even if the process is amicable, it involves many tough decisions, legal hassles, and painful emotions that can drag out over several months, or even years.
Review and Update
It is absolutely critical that you review and update your estate plan—not only after the divorce is final, but as soon as possible once you know the split is inevitable. While a Separation Agreement might help for some things, it may not take care of all of the estate planning issues that could arise.
Your marriage is legally in full effect until your divorce is finalized. That means if you die while the divorce is still ongoing and you haven’t updated your estate plan, your soon-to-be-ex spouse could end up inheriting everything. Maybe even worse, in the event you’re incapacitated before the divorce is final, your ex would be in complete control of your legal, financial, and healthcare decisions.
Given the fact you’re ending the relationship, you probably wouldn’t want him or her having that much control over your life and assets. If that’s the case, you must take action to review and update your plan, and chances are, your divorce attorney is not thinking about these matters on your behalf.
The following are a few of the most important updates you should consider making as soon as possible when divorce is on the horizon.
1. Update your power of attorney documents for healthcare, financial, and legal decisions
Who would you want making life-and-death healthcare decisions on your behalf if you were incapacitated? If you’re in the midst of divorce, chances are you’ll want someone other than your soon-to-be ex making these important decisions for you. You must take action to correct that! Contact us now; don’t wait.
Similarly, who would you want managing your finances and making legal decisions for you? You’ll most likely want to select another individual, particularly if things are less than friendly between the two of you.
2. Update beneficiary designations
Failing to update beneficiary designations for assets that do not pass through a will or trust, such as life insurance policies and retirement accounts, is one of the most frequent—and tragic—planning mistakes made by those who get divorced. If you get remarried following your divorce, for example, but haven’t changed your IRA beneficiary designation to name your new spouse, the ex you divorced 10 years ago could end up with your retirement savings upon your death.
In our next blog, we’ll continue with part two in this series on the critical estate-planning updates you should make when divorce is inevitable.
This article is a service of Susan L. Hunt, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, ™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.