9 Helpful Things to Consider When Revising Your Estate Plan Post-Divorce
If you’ve recently gone through a divorce, it is a good idea to revise your estate plan. Updating your estate plan can ensure that you're protecting your assets as well as any heirs to your estate. If you've been putting off updating and revising your estate plan, don't delay any longer. The time to protect your estate is now. As you revise your estate plan post-divorce, remember these 9 helpful tips.
Give your Estate Attorney Your Divorce Agreement
Your estate attorney needs to know what obligations you may have to your ex-spouse or any minor children not only presently but also in the event of your death.
Update Durable Medical Power of Attorney
A durable medical power of attorney allows you to name someone who will make decisions for you if you become incapacitated. While you can always keep this person your ex-spouse, it may be wise to at least reevaluate if they are still the best person for the job given the new relationship.
Update Power of Attorney
The power of attorney is a trusted friend or family member who acts as an agent to make decisions on your finances and assets. If your current power of attorney names an ex-spouse, this may also be something you’d like to update to a close friend, relative, or trusted advisor.
Update Will & Trust
If your ex-spouse was the beneficiary of your assets upon death, and you no longer want them to have control or receive assets from your estate or trust, then it is time to remove them. You should remove provisions from your ex as well as remove them as executor and trustee of your estate.
If you choose to keep your ex as the beneficiary of your estate upon death, it would be wise to write a dated letter to your attorney stating this, so that no family members can contest the will.
State Guardianship for Minor Children
Whether you name your spouse as the guardian of shared minor children or not, your ex will most likely obtain guardianship. However, if for some reason the spouse should be deemed unfit – for example, due to a substance abuse addiction – it would be wise to leave details to this in your stated guardianship and even leave money to fund the litigation procedure to deem the surviving parent unfit.
Trust for Minor Children
If there is no trust left behind and your ex is your children’s guardian, then your ex will have control over your minor children’s money until they turn 18. However, you can leave a revocable trust for your minor children, that names someone of your choosing to have access and control of the money if you pass away.
Life Insurance Requirements
Pay close attention to your life insurance obligations within the divorce agreement. If you were to let the life insurance policy lapse or make a change that breaches the divorce agreement, if you pass away this could end in litigation for those involved. Allowing your estate planning attorney to have a copy of your divorce agreement should avoid such issues.
Retirement Plan Designations
An easy area to forget to change is your retirement plan beneficiary designations. It’s important to ensure that your beneficiary designations for any 401k or IRA accounts are consistent with the divorce agreement. If for some reason, you decide to keep your ex-spouse as your beneficiary, it is best to still update any beneficiary designations dated after the divorce is final. Doing so will avoid the timely and costly process of litigation.
Prenuptial Agreement for Next Marriage
If you’re getting married again, make sure you have a prenuptial agreement that aligns with your estate plan.