Divorce is not just a significant emotional journey but also a complex legal process that impacts various aspects of life, including estate planning.
As you navigate through the dissolution of a marriage, it's crucial to understand how this change affects your estate plan and what steps you need to take to ensure that your assets are distributed according to your wishes after the divorce.
1. Revisiting Your Will
Your will is one of the first documents you should review after a divorce. Most married individuals have their spouse as the primary beneficiary and executor in their will. Post-divorce, these designations should be revisited.
If you do not update your will, there’s a risk that your ex-spouse could still inherit your assets or be responsible for administering your estate if you pass away before making necessary changes.
2. Changing Beneficiaries
Like updating your will, you should also review and alter the beneficiary designations on your life insurance policies, retirement accounts, and other financial instruments. Under federal law, divorce does not automatically revoke the designation of a spouse as a beneficiary on non-probate assets such as 401(k) plans and life insurance policies.
Therefore, unless these beneficiary designations are updated, your ex-spouse might still stand to benefit.
3. Powers of Attorney and Healthcare Directives
Updating your estate plan post-divorce involves several key documents, particularly those granting authority to decide on your behalf if you become incapacitated. Here's what you need to consider:
- Durable Power of Attorney
- Healthcare Proxy
- Review and Re-appoint
- Legal Consultation
By revisiting and updating these critical documents, you can safeguard your future decision-making and ensure that your health and finances are managed by someone who respects your wishes and best interests.
4. Trusts and Divorce
If you have established any trusts, you should review and modify them as necessary. This is particularly important if the trust was designed to benefit your spouse, as is often the case with marital trusts.
Amendments might be required to remove your ex-spouse as a beneficiary or trustee. Failing to make these changes can result in parts of your estate unintentionally passing to your ex-spouse.
5. Guardianship Considerations
For those with minor children, divorce can also impact decisions about guardianship. Although legal custody and guardianship are typically addressed during the divorce proceedings, ensuring that your estate plan reflects any changes is vital.
You may need to update your will to specify who should be responsible for your children's care should something happen to you.
6. Understanding Your State’s Laws
Estate planning and divorce laws vary significantly from state to state. In some states, a divorce automatically nullifies any existing will that benefits a spouse, while in others, the divorce has no immediate effect on the will.
Knowing the specific laws in your state can help you better navigate the necessary updates to your estate plan.
Need Legal Advice? Contact Us Today!
Navigating a divorce? Ensure your estate plan reflects your current wishes. Review and update your will, beneficiaries, and key documents now. Protect your assets and loved ones' future by consulting a legal professional.
Call Diggs & Sadler today at (713) 766-5355 to learn more!