Summary:
Your estate plan reflects the legacy you want to leave behind, so each life
change you experience will likely impact your plan. If you are going through
divorce, you should certainly take great care to update each element of your
estate plan, including your will, trusts, powers of attorney, living will and
death beneficiary accounts, to ensure that your current goals and objectives
will be realized when you die.
Divorce
is stressful period of transition and change for most people. While there many
things on which you will need expend your attention during this challenging
time, you should not forget that your estate plan also requires addressing now
that you've experienced this life change.
One of
the first things you will want to do is update your will. Generally, your will
names your spouse by name, so if you die and your will leaves a sizable
inheritance to "John Doe" or "Jane Doe," then your executor
(or the trustee of your trust) and the
courts will be obliged to follow this instruction, even if this person is your
ex-spouse. For many people, such an outcome might be especially frustrating and
painful, so you should deal with updating your will promptly.
You will
also need to go through any asset or account that has a death beneficiary destination on it to remove your ex. Recent court cases have ruled that, even
if you divorce your ex and update your will, your ex will still receive the
money from your life insurance or retirement account if you do not update the
paperwork on those accounts. The single determining factor regarding who gets
your transfer-on-death or pay-on-death accounts is the name on that account's
death beneficiary designation form, so it is vital that you make sure you
update each of these accounts.
Additionally,
you'll want to tend to your powers of attorney and living will. Chances are,
you do not want your ex managing your financial affairs or making healthcare
decisions (including end-of-life decisions) for you after you're divorced.
Executing new powers of attorney and a new living will is often relative quick
and straightforward process.
If you
have a living trust, you should investigate updating this part of your estate
plan, as well. For many people, their spouses may not only be beneficiaries of
their trusts, but trustees, as well. A capable estate planning attorney can
assist you with making the changes your trust needs to address your divorce.
Finally,
you do not have to wait until your divorce is finalized in order to begin
updating your estate plan. Even is you anticipate that your divorce may take
several months or years to complete, you can (and should) start working on
updating your estate plan right away. Keep in mind, though, that the law in
every state says that you cannot disinherit your spouse so, even if your
preference is to leave your ex nothing, you will not be able to make that
happen until the divorce is final.
This article written and published by:
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