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Updating your estate plan after a divorce

On Behalf of | Oct 6, 2020 | Estate Planning |

When you divorce your spouse, there are many aspects of your life that undergo immediate changes. However, your estate plan is not one of them.

Even if your divorce is amicable, you probably do not want your ex-spouse to receive the same benefits or have the decision-making power that your original estate plan provided. Once you divorce, you must make changes to your estate plan to reflect your current circumstances. Forbes Magazine describes several changes to your estate plan that you should make as soon as possible following divorce finalization.

Will / Trust

Many people designate spouses to serve as executors of their wills or trustees of their trusts. However, you may no longer want your ex-spouse to serve in this capacity. If so, you should revise your will / trust to name a new executor and trustee. You should also remove any provisions bequeathing property to your ex-spouse that you no longer want him or her to receive.

Power of attorney / Healthcare Directive

During your marriage, it probably made sense to give your spouse decision-making power over your health care and/or finances in the event of your incapacitation. Now that your marriage is over, however, it probably makes a lot less sense. You should remove your ex-spouse as your proxy and choose someone whom you trust instead, such as a close family member or friend.

Trust for minor children

If you have children together, your ex-spouse will probably serve as their guardian if they are still minors at the time of your death. There may be steps you can take to prevent this, but it may not be worthwhile unless putting your children in the care of your ex-spouse would endanger them.

However, just because your ex-spouse serves as your children’s guardian does not mean that he or she has to have control of their money. You can set aside a trust for your children’s benefit and put it in the care of a dependable trustee, and your ex-spouse will have no control over or access to it.

Retirement Accounts

Now may also be a good time to review your beneficiaries under your 401K, 403(b), IRA, and other retirement plans. While your ex-spouse may be removed as a beneficiary at the time of your divorce, it makes sense to add in a new primary and secondary beneficiary