Creating Your Own Path: Estate Planning After Divorce
You’ve made it to the end of your divorce journey, and you are ready for a fresh start. Congratulations! Your post-divorce estate plan is an integral part of the new life you are creating, and it is a critical final step in the process of untangling your life from that of your ex.
Here are five things to keep in mind when planning your estate after divorce:
Your legal obligations. Your judgment of divorce or divorce agreement may include obligations that must be part of any comprehensive estate plan, such as to keep your ex as a beneficiary on a retirement account or maintain a life insurance policy benefiting them. Review your judgment carefully and always provide a copy to your estate planning attorney.
Your Will and/or Trust. If you created an estate plan during your marriage, your judgment of divorce will likely function to revoke either your entire will or just the portion leaving assets to your ex, depending on your state. Your judgment of divorce will not alter your trust, however, unless your trust agreement specifically includes language “in case of divorce.” Your best bet is to revoke your prior estate plan and create a new one, naming new beneficiaries. If you want to include your ex in your will, you will need to do so in a new will that is dated after the date your divorce became final in order to make this intention clear.
Your Beneficiary Designations. Many of your assets pass to beneficiaries outside of a will, including retirement assets and bank and investment accounts with transfer on death designations. During marriage, many people name their spouse as the beneficiary for these kinds of accounts. Because these beneficiary designations will not automatically change after your divorce is final, updating them is critical.
Considerations If You Have Children. If you share custody with your ex and leave money to your minor children either by will, trust, or beneficiary designation, you will also need to decide whether you want your ex to manage your child’s inheritance. If not, you will need to create a plan that names an adult of your choosing as conservator or trustee.
Living Documents (Durable Power of Attorney for Finances, Patient Advocate Designation, HIPAA Authorization). If you did not update these while your divorce was pending, you’ll want to get to them right away. A Durable Power of Attorney for Finances allows you to appoint a trusted person as your agent, to take care of your financial matters should you be unable to do so yourself. A Patient Advocate is a person you choose to make medical decisions for you if you are unable to express your wishes. A HIPAA Authorization names people you want to have access to your protected medical information.
We know, this looks like a lot of things! After divorce, no one will blame you for feeling done with paperwork and lawyers for a while. We get it. That’s why at Treetown Law we strive to create a welcoming, positive, and seamless experience for you. We’ll meet with you around naps, school schedules, and even after bedtime. We will help you get this final task done and dusted.
If you haven’t initiated divorce proceedings yet or your divorce is pending, there are some steps you can take right away. Check out our blog post from March 31, 2021—Separated or Filing for Divorce? Here are Three Estate-Planning Documents to Update When Your Relationship Breaks Down. And be sure to come back to the blog soon for the last entry in this series, Estate Planning for Your Blended Family.
