If you have just gone through the emotional and financial upheaval of a divorce, the last thing on your mind is contacting an attorney to make changes to your estate plan. Yet, it is essential that you review and update your estate documents to reflect this major life change. During the divorce process, you likely dealt with property division, and possibly child custody and spousal support. Your estate plan should reflect changes. Otherwise, your assets could be distributed in ways you neither expected nor intended.
1. Rewrite Your Will After the Divorce
Divorce will not revoke your will in its entirety, but it will revoke any provision in the will in favor of your former spouse, such a gift or fiduciary appointment. Regardless, it is still important to revise your will to designate who should inherit your assets and act as your personal representative in place of your former spouse. Otherwise, the court will make these decisions for you.
If you have children, you should also name a guardian in your will. Upon the death of one parent, the surviving parent will usually be granted sole guardianship of the children. However, in the event the other parent has also died, or is for some reason deemed unfit, the court will need to appoint a guardian and will look to your will for guidance.
In addition, if you change the provisions in your will to benefit your children only, you may not want your former spouse to have control over the assets left to your minor children. In this case, you may want to consider establishing a trust so that you can direct the trustee to use the assets to pay for specific items for the benefit of your children, such as school tuition and expenses.
2. Name New Beneficiaries on Life Insurance and Retirement Accounts
Assets that let you name a beneficiary, such as life insurance and retirement accounts, are not controlled by your will. The bank or insurance company will pay out benefits directly to whoever is named as the beneficiary on the account. The law will not revoke a designation naming your former spouse as a beneficiary in all circumstances. This is why it is crucial to name new beneficiaries as soon as your divorce is final.
3. Update Your Power of Attorney and Health Care Proxy
In most cases, married couples give each other the power to make financial or medical decisions for them in the event they become incapacitated. You will need to appoint new individuals act as your agent in these important roles. You can appoint a parent, sibling, close friend or adult child. These powers are usually quite broad, so take time to consider who you want to have this important decision-making authority.
Unintended consequences may result if you do not revisit your estate plan after a divorce. If you are contemplating or have recently gone through a divorce, contact us. We will review and update your estate plan in light of this major life change.