Fifty percent of marriages end in divorce. Fifty percent! Divorce can be one of life’s most stressful and messiest experiences, even if it is a peaceful split. It’s simple to overlook updating your estate plan or to put it off until it’s too late when so many significant changes are happening. The last thing you undoubtedly want to do is deal with yet another lawyer.
Failing to modify your estate plan for divorce could have tragic repercussions. And you should update your strategy as soon as you understand the divorce is unavoidable—not after it has been finalized. Here’s the reason why: Your marriage remains legitimate until your divorce is final, so if you pass away or become disabled during the divorce process and haven’t altered your estate plan, your soon-to-be ex-spouse may end up controlling all your assets and living arrangements. You need to act as soon as possible unless you want your ex to have that much influence.
However, some states have laws restricting the ability to change one’s estate plan once a divorce is complete. One may need to consider the following changes to one’s estate plan when divorce is approaching and before you have filed.
Create a New Will
As soon as you make the decision to get a divorce will because once divorce papers are filed, you may not be able to change your will. Additionally, since most married couples name each other as executor and primary benefit considering getting a divorce, you should talk to us immediately to fulfill these responsibilities.
Amend Your Existing Trust or Create a New One
If you have a revocable living trust, you’ll also need to refresh it. As with wills, the laws governing whether, when, and how to change a trust during a divorce can vary, so if you’re considering getting a divorce, you should talk to us immediately. You will likely want to replace your soon-to-be ex-spouse as successor trustee if they have been so designated, in addition to rethinking which assets he or she should receive through the trust.
Change Your Beneficiary Designations
You should update the beneficiary designations for assets like retirement plans and life insurance policies that do not pass through a will or trust as soon as you learn that you are getting a divorce. Unfortunately, we see this all the time. Not informing your beneficiaries can cause serious issues in the future.
Change Your Power of Attorney Documents
You must update your power of attorney documents as soon as the divorce is inevitable unless you want the person you are removing from your life to make all your legal, financial, and medical decisions in the event of your incapacity. All grown-ups over age 18 should have both a sturdy monetary and clinical legal authority.
Your primary goal during the divorce process should be to limit your soon-to-be ex’s influence over your life and assets if you pass away or become incapacitated before the divorce is finalized. So, while the divorce is going on, the people you give power of attorney to, name as trustee, choose to receive your 401(k), or add to your estate plan are often just temporary.
Legacy Counsel can help you ensure that your estate plan is up to date to consider the most recent changes to your life, family dynamics, and asset profile. If you have already begun the divorce process, contact us as soon as you know it is coming. If you want to protect what matters most, schedule a Legacy Session.
