A divorce can be one of the most difficult times in a person’s life. After all, you separate from the person you thought you would grow old with. You may not think about your estate plan when going through the emotional and financial turmoil of a divorce. However, revisiting your plan to see what changes you need to make is important.
After a divorce, you need to take certain steps to update your estate plan. If you do not, your assets could be distributed in ways you never expected. They could go to your ex-spouse, something you may not want. Review everything, including Wills and Trusts, and speak to an attorney for additional guidance.
Things to consider when revisiting your estate plan after your divorce
- Revoke your Will and make a new one.
If you already have a Will, you must have included your ex-spouse and named them as one of the beneficiaries. After a divorce, you may not want to give your precious assets to your ex anymore. Therefore, revoking your old Will is the best way to do it. Hire an attorney to write up a new Will so you can leave your property to the people of your choice.
- Revoke the old living trust.
Revocable living trusts are also documents that spell out who receives your property after your death. The only difference is that the assets in a trust avoid probate, unlike the ones in a Will. If you and your ex made a joint trust, the assets in it could be divided between you two upon death. Revoke that trust and create a new one that fits your single life.
- Update beneficiary designations.
Do not forget to review the beneficiary designations after your divorce. You may no longer want to transfer assets to the same people as you did when you were still married to your ex-spouse. Things to review include:
- Life insurance policies
- Investment accounts
- Bank accounts or certificates of deposit (CDs)
- Retirement plans like 401(k)s, IRAs, and pensions
- Real estate
You can simply remove your ex-spouse’s name from the Will if you are single. However, if you are already married again, you can add a different name by filling out a new beneficiary form.
- Make new Powers of Attorney.
Powers of Attorney are documents that give other people the power to act on your behalf after you pass away. There are two such documents: one for medical decisions and one for financial matters. If you already have Powers of Attorney that give your ex-spouse the authority to decide, revoke them and create new ones.