Although it is a fact that none of us would like to admit, 50% of marriages end in divorce. Therefore, it is a fact of life that we need to realize that it is at least a possibility that marriage may end in divorce. For this reason, the worst thing you can do, other than ignoring estate planning completely, is to avoid revising your estate planning legal documents following a divorce.
The common family estate planning legal documents usually include Wills, Financial Power of Attorneys, Health Care Power of Attorneys, Living Will Declarations, and either a Revocable Living Trust or an Irrevocable Medicaid Trust. However, after a divorce from the spouse that is listed in your estate plan is a major life change that mandates changing and updating your estate plan.
These important legal documents that you executed with your former spouse most likely granted your former spouse an incredible amount of power. For instance, your former spouse was likely giving financial power of attorney and health care power of attorney as the attorney-in-fact over you. Meaning, your former spouse could have the power to make important financial decisions on your behalf, make important health care decisions on your behalf, and even authorize the withdraw of life support systems should you enter into a vegetative state. I am sure most people would not be comfortable having their former spouse continue to have this power.
In addition, and possibly more importantly, if you established Last Will and Testaments and Revocable Living Trusts, your former spouse is likely listed as the settlor and co-trustee of your trust property that was transferred into your trust for probate avoidance, tax planning, and/or Medicaid planning purposes. Although it is likely that the divorce proceedings handled most of these property related matters, it could very easily leave holes when it comes to your own financial and property affairs in the event of your death. In addition, should you die without revising these important legal documents, your surviving family members could be in a situation where the documents are invalid, the documents do not provide for someone other than your spouse to inherit and/or serve as successor trustee following your death, your former spouse inheriting a portion of your estate through your trust, or having your family go through a difficult probate proceeding.
Therefore, it is extremely important that following major life changes, such as divorce, that you update your estate planning legal documents to ensure that your documents are still up to date and continue to meet your estate planning legal objectives.
If you are in this situation and would like to discuss updating your estate plan or discuss your new estate planning legal objectives, contact our office to schedule an appointment.