One of the most challenging times in your life may be divorce. It is never easy, and can be emotionally and legally trying regardless of how friendly you are with your ex. However, updating your estate plan is a step that is easily overlooked during the divorce process. An estate plan that is not updated could be a costly mistake.
Here are five ways to protect your estate plan during the marital split:
- Eradicate obsolete requirements in your will or trust. Most likely, your pre-divorce estate plan is designed to deliver the majority of your estate to your surviving spouse (and children). In some states, if you pass away after your divorce decree is final, the state will extinguish all rights of your former spouse. However, if you pass before the decree is final, your soon-to-be-ex may be entitled to your estate. You can avoid all the confusing drama for your family by keeping your estate plan updated and removing any out-of-date provisions.
- Update your trustee and personal representative. You need to examine relationships closely and select someone that you completely trust. Don’t make the careless mistake of leaving your ex in charge of your estate.
- Guardianship updates are needed for children and/or pets. For families who have minor children, the estate plan can serve as the opportunity to declare a guardian of your children. (Your custody arrangement could still supersede your guardianship wishes.) You still have the right to declare your wishes. This provides guidance for a guardian in the event your ex-spouse is no longer living. You can also update your care preferences for your beloved pooch or feline. If you have pets, do act to protect them in the event you are no longer living.
- Health care directives and powers of attorney should be revised. This is the one of the most important documents to update. If you become incapacitated, and unable to make decisions regarding your health, do you want your ex-spouse providing your health care directives? It is very important to update your power of attorney and health care directives as soon as you file for divorce. By updating this information, you can avoid any confusion regarding your medical care if you were to become incapable of making decisions on your own.
- Provide current information for your beneficiary designations. This update should include any life insurance policies, bank accounts, retirement funds, investments, and annuities. In most situations, you will be restricted from making any beneficiary updates until the divorce is final.
These 5 steps can help you protect your estate -and your family’s future – after you are deceased. By overlooking your estate plan during or after a divorce, you may be leaving your loved ones scrambling in the aftermath of divorce. Tidying up all the loose ends during and after divorce will protect you and your loved ones from any careless mistakes.
