Most people would agree that their ex-spouse is the last person they want making financial or medical decisions on their behalf or inheriting their most significant assets when they die. Many also incorrectly believe a divorce automatically prevents these situations from occurring. Though state law in many jurisdictions removes your ex-spouse as a beneficiary of your will, it does not necessarily prevent them from receiving any of your assets. The only way to be sure your assets go to the people you want is to update your estate planning.
Certain assets you may own (retirement plans, life insurance policies, etc.) will be paid directly to a designated beneficiary. When couples marry, they typically name each other as the beneficiary of these assets. If this includes you, then you need to request the proper forms and change this. But before you do, consider who is the right person to designate and what tax considerations you now need to be aware of. If you have children, should you name them, someone else or perhaps a trust would be a better option.
Your will should be updated with a new executor. If you have minor children, you should also name a guardian for them. Upon the death of one parent, the court usually names the surviving parent as sole guardian. However, in certain circumstances (e.g. the ex-spouse’s prior death), the court may have to appoint a guardian and knowing your wishes would be appreciated.
Your health care proxy needs to be revised so that your ex-spouse is no longer the one making life and death decisions for you. In addition, your power of attorney needs to be changed so that your ex-spouse’s power to know and manage your financial affairs is terminated.
As you can see, perhaps no life event imposes a more significant need to update an estate plan than divorce. Don’t procrastinate, contact us today and set up a meeting to ensure you protect yourself and your children.