Divorce is never easy, but it is important that estate planning continues to take precedence before and after a divorce. Depending on your situation and professional legal guidance, some estate planning items can be updated now, while others may need to wait until after the divorce is final. Be mindful that the divorce decree may state no changes can be made to your estate plan until later. This article addresses the critical estate planning areas that must be refreshed during this significant life event.
Your will
You can revoke your old will and draft a new one. Reviewing the old will as a starting point and drafting the new one to distribute your assets according to your current wishes and designate new beneficiaries is essential. Depending on your situation, some beneficiaries may be the same, minus your spouse.
Your Trust
If you have a joint trust with your spouse, depending on the type of trust, you may be limited in what you can do.
Irrevocable trusts usually remain unchanged during divorce settlements, and neither the trust nor a judge can revoke or change it. However, some circumstances may allow an irrevocable trust to be terminated, such as if all beneficiaries agree or the trust's purpose has been fulfilled.
Revocable trusts are more straightforward to revoke due to divorce.
Regardless of the type of trust, seek professional legal help from a trust specialist. Depending on your state, specific rules will apply to revoking your trust. This professional can assist you in setting up a new trust listing the beneficiaries and trustees, adding or removing particular assets now in your name, reflecting your wishes.
Property
If you're preparing for divorce, making a list of assets in your name is vital. However, listing joint assets will save time as you navigate the division of property process. Once the divorce is final, transfer assets awarded during the proceedings into your name only.
Power of Attorney
You must update your power of attorney documents to appoint someone other than your ex-spouse to make financial and medical decisions on your behalf.
Guardianship
If you have children together, it's essential to revisit the guardianship provisions in your estate plan to ensure that they reflect your current preferences for who should care for them if you die.
Retirement accounts and life insurance
Review and update the beneficiaries on your retirement accounts and life insurance policies so that they align with your post-divorce wishes.
These are some of the estate planning considerations after a divorce. Working with financial and legal professionals to update your post-divorce estate plan is vital so that it is comprehensive and reflects your wishes as an unmarried individual.
Important Disclosures:
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by Fresh Finance.
LPL Tracking #610356
Sources:
https://www.divorcenet.com/resources/how-to-revise-your-estate-plan-after-a-divorce.html
