For most people, a divorce can be overwhelming and affects all aspects of life including your estate plan. If you are like other people, you may not update your estate plan until it is too late. But updating your plan for divorce is necessary. Often, you cannot depend on your divorce attorney to talk about estate planning. If you are going through a divorce, there are things you must know. You must update your estate plan once you and your spouse separate, not until your divorce is final.
Keep in mind that while your divorce is ongoing, you remain legally married to your spouse. Thus, when you become incapacitated or die while the divorce is ongoing, your spouse can have full control over your assets and life. With your relationship ending, you may not want your soon-to-be-ex to have this much control and power. So, reach out to an estate planning attorney from The Ebbert Law Firm to start drafting relevant documents. While your divorce is ongoing, here are important estate planning steps you must take:
Update Your Beneficiary Designations
Once you decide to get a divorce or know you are getting one, update your beneficiary designations for assets that don’t pass through a trust or will. These assets include bank accounts, retirement plans, and life insurance policies. Not changing your beneficiaries can lead to major problems in the future.
Let us say you remarry after the divorce and do not change your 401(k)-plan beneficiary to name your new significant other. Your ex-spouse could collect your retirement account when you die. Also, due to the limitations on changing designations following the filing of a divorce, the timing of the change is important. Your attorney can help you understand the injunction regarding beneficiary designations. If you are expecting a divorce, consider changing the beneficiaries of your accounts before you file the papers. Also, you can make the same changes after divorce to match what your divorce settlement determines.
Update Your Will
During marriage, your Will probably named your spouse as your main beneficiary. But when a divorce happens, you may want to reconsider the party who inherits your assets. Not updating your Will can result in your spouse inheriting your estate when you die or make financial and healthcare decisions for you when you become incapacitated. Thus, it is best to revise your will right away. Before you update your estate planning documents, consult with a skilled lawyer to ensure these actions don’t violate any temporary or mutual restraining orders that the court orders in your divorce proceedings. The changes that you can make in your will include powers of attorney, beneficiaries, the executor, and guardianship. Consult with your estate planning attorney as they can help you navigate state laws when you update your will.
Have a Plan in Place Post-Divorce
While your divorce is ongoing, your main goal is to limit the control of your spouse over your assets and life when you die or face incapacitation. The people you granted power of attorney to, named as a trustee, designated to get your retirement accounts during your divorce are just temporary. After the finality of your divorce and the division of your marital property, you must review and update your estate planning documents to ensure they match your current living situation and new asset profile. From here, your estate plan must evolve while your life changes, particularly after major life events like remarriage, childbirth, and death. An estate planning attorney can help you create a suitable estate plan before, during, and after your divorce, so you can make the best choices for yourself and your children.