Divorce estate planning is an essential part of getting divorced. Estate plans created during your marriage need to be revised with new estate planning documents. If you do not update and revise your estate plan, your ex-spouse may inherit assets. If your ex-spouse remarries, his or her new spouse and their children could inherit.
Your last will and testament
After divorce, the best way to revise a will is to execute a new will, and revoke your old will. If you made a will before getting divorced, the law in most states provides that any gift made to your spouse is automatically revoked by the divorce. However, your spouse’s gift will go to either an alternative beneficiary or the residuary beneficiary, which may not be what you wish. Therefore, it is best to make a new will that reflects your current wishes. This should include the persons or entities you wish to receive your property, the person you wish to be the executor of your estate (chances are your current will designates your spouse), and the person you would like to be the guardian of your minor children.
As with a will, a new living trust should also be created after a divorce.
Your spouse is probably designated as the beneficiary on various bank and other financial accounts, life insurance policies, and possibly on real estate and motor vehicles if allowed in your state. You will need to change the designation of such beneficiaries.
Generally, retirement accounts (such as IRAs, 401(k)s, 403(b)s, and pensions) are considered marital assets and are divided between the parties in a divorce. Your divorce judgment may determine what, if any, changes you can make to the beneficiary of such accounts.
To make a beneficiary change you will need to obtain the necessary forms from your financial institution, brokerage firm, or employer.
Financial powers of attorney
A financial power of attorney can give your agent broad powers. If you have appointed your spouse as your agent on any financial power of attorney, you should execute a new power of attorney, revoking the current power, and deliver a copy to all of your financial institutions.
If you have a healthcare power of attorney (sometimes called an advance directive, designation of patient advocate, or healthcare surrogate), you probably appointed your spouse to make medical treatment decisions for you. You may revoke the document and execute a new document appointing another trusted person as your agent. Your healthcare providers should be notified of the change.
If your parents have their own estate plan that includes you, your children, or even your spouse as beneficiaries, they should review their plan as well. Their documents may also need to be redrafted to keep assets out of reach of your ex-spouse.
For any property with a title document (real estate, motor vehicles, boats, etc.), be sure to have the titles changed to reflect either you or your spouse as the new owner.
Sometimes divorced couples remain good friends and continue to trust each other on various matters. Nothing prevents you from leaving a gift to your ex-spouse in your will, or designating him or her as your beneficiary, your agent in a power of attorney, or custodian of minor children.
Estate planning divorce considerations include re-evaluating your entire plan and preparing and executing new documents. This should be done as soon as possible.
LegalZoom can help you revise the key documents in your estate plan after a divorce. Just fill out a questionnaire, and we’ll check your answers for consistency and completeness and send you the final documents. Our personal legal plan also offers independent attorney advice to help you update your estate planning documents.
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