Going through a divorce is never easy. There is the divorce proceeding itself, the division of assets, income issues, retirement asset issues, child support, and spousal support that all come up and become a very public battle in the courtroom. When going through divorce, as well as, after the divorce becomes final, estate planning tends to become something that people forget to address when a divorce occurs.
- Update Your Healthcare Power of Attorney
This should go without saying. If you are going through a divorce, obviously, you would not want your soon to be ex-spouse making your healthcare decisions for you or speaking with doctors and other medical providers about your medical conditions. In addition, your healthcare power of attorney might state that upon divorce the healthcare power of attorney is considered revoked.
- Update Your Durable Power of Attorney
Just like your healthcare power of attorney, your durable power of attorney should be updated for the same reasons. Also, your power of attorney might contain language that states it is revoked upon your divorce. It is important to update your durable power of attorney if you are getting divorced.
- Update Your Last Will and Testament
Your Last Will and Testament, the legal document which states where your stuff will go and who will be in charge of distributing your assets after you die, will need to be updated. For many married couples, they will name their spouse as executor as well as the person who will be inheriting their assets upon their death. This should be changed immediately.
- Review Your Marital Agreements
In marriage, sometimes married couples will execute pre-marital agreements and post-nuptial agreements. During your divorce, these documents should be reviewed to determine your legal rights, as well as any affect the documents may have on your current estate planning strategy.
- Update Your Living Trust
If you have a living trust, and you are going through a divorce, it is time to update it. It always amazes me how many families do not establish a living trust when they are in a blended family situation. Failure to have a living trust in this situation can be a sure way to ensure that the assets of the first spouse to die end up with the second spouse’s family.
- Review Your Financial Accounts and Change Beneficiaries (If You Can)
During a divorce proceeding, this can sometimes be difficult. When you file for divorce there is typically an injunction in place preventing your from removing assets, changing accounts, changing beneficiaries, or retitling accounts during the divorce proceeding. In addition, there may be a permanent order from the court following the case regarding the future of how these accounts should be titled and who should be named as beneficiary. When your divorce case ends, it is time to meet with your estate attorney to review these financial accounts and the divorce decree to determine how to update your estate planning.
- Review Your Life Insurance Policies or Purchase New Life Insurance Policies
This can also be difficult. Again, there will usually be a court order in place preventing you from changing the beneficiary on your life insurance policies during the divorce proceeding. This will usually need to occur after. Also, if you have minor children, there may be a court order indicating an obligation for you to obtain life insurance naming your children as beneficiaries until they reach a certain age. After the divorce case is over, it is time to review your life insurance policies, make the proper beneficiary changes, or even purchase new life insurance policies.
- Speak With a Financial Planner
After your divorce case is over, it is time to speak with a financial planner. You are moving forward with a new chapter in your life. Financially, your life will be different than it was before. It is always a good idea to begin this process by speaking with a financial planner so they can develop a plan with you to put you on the right track toward a bright financial future.
- Develop a Plan For Moving Forward
Your life will be different now, that is for sure. Just as it is important to speak with a financial planner, it is important to develop a plan to move forward with your life and make plans for the future. This is why it is important to speak with your estate attorney as your goals for your children and other loved ones have now changed. You should make sure that these updates occur.
- Decide If You Still Wish to Leave Anything to Your Spouse
Sometimes, ex-spouses will still desire to leave each other something from their estate. This is especially true if you have minor children together and you pass away while your children are still minors. After the divorce proceeding is final, your spouse will have no legal rights to inherit from your estate as your spouse. Also, this is an important time to consider how your estate will be divided in the future should you decide to remarry. Blended families and multiple marriages are one of the biggest reasons families end up in conflict and in court when a loved one passes away.
I hope you found this article interesting and educational. If you feel its time to sit down and discuss how to leave the perfect plan behind for your loved ones, give us a call at (615) 490-0477 or CLICK HERE to schedule your estate planning and asset protection legal strategy session!