Estate planning after divorce: 5 things to do
Going through a divorce is tough. The last thing you want to do post-divorce is sit down with another attorney to go through your estate plan. However, you just experienced a significant life event. Estate planning after divorce is critical to preserve your assets and protect your children.
5 things to do after your divorce
Update your will
Most states treat divorce as if your ex-spouse predeceased you, so your estate would effectively go to your next-named beneficiaries. However, depending on your jurisdiction, that may not be the case. Therefore, family law attorneys recommend redrafting your will and other estate planning documents immediately following a divorce.
Like it or not, if you have children, your ex-spouse is their guardian if something should happen to you. However, you should name a backup guardian in the event your ex-spouse predeceases you or a court determines that your spouse is not fit to become the guardian.
Consider a trust for minor children
Your ex-spouse might not be good at managing the assets you left your children. Consider setting up a revocable trust to benefit your children, naming someone other than your ex-spouse as trustee. Your trustee manages the assets for the benefit of your children. This may especially be a good idea if your ex-spouse is remarried and/or has other children. You want to preserve your assets to benefit your children.
Check beneficiary designations and update property titles
Certain assets don’t pass by your will, such as insurance policies, transfer on death bank accounts, retirement accounts, and annuities. These might go to your ex-spouse if you don’t change the beneficiary name on those accounts. Contact all your financial institutions and review beneficiary information. Check all your titles on properties to make sure that your assets are going to the correct beneficiaries.
Update power of attorney documents
If you don’t want your ex-spouse to be in charge of your financial and medical decisions if you are incapacitated, change your power of attorney documents. Update any financial power of attorney, health care surrogate, and advance medical directives in which you have named your ex-spouse to act as your agent or make decisions for you. You may not want your “ex” to be in charge of your medical treatment, your money, or your life!
Double-check your parent’s estate plan
Make sure that your parents have not named your ex-spouse as a beneficiary in their wills or for any bank account or life insurance policy. Check that they have not named him or her, even as a backup, as their financial power of attorney, health care surrogate, or agent for their advance medical directives.
Life after a divorce is difficult. Take action to protect your family and your assets. Review your estate plan with a trusted estate planning attorney. Rest assured that you are doing your best for your family’s future.
Parts of this article have been excerpted from Estate Planning for the Sandwich Generation: How to Help Your Parents and Protect Your Kids.
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