Divorce is tough. The legal battles, emotional turmoil, and lifestyle changes can be overwhelming. But once the dust settles, there is another crucial task on your list: updating your estate plan. Ignoring this step can lead to unintended consequences.
Revise your will
Start with your will. If your ex-spouse is listed as a beneficiary, you need to make changes. Many states treat your ex-spouse as if they predeceased you. But not all states follow this rule. It is essential to create a new will and choose new beneficiaries. This ensures your assets go to the right people.
Update guardianship for your children
If you have minor children, appointing guardians is vital. In most cases, your ex-spouse will have custody if you pass away. But what if they cannot care for your children? Designate a trusted guardian to ensure your children’s well-being. This person will make decisions about their support, education, and health care.
Reassign power of attorney and health care agents
You likely named your spouse as your financial agent or health care surrogate during your marriage. After divorce, you may not want them to hold these roles. Some states may automatically disqualify your ex-spouse, but it is safer to update these documents. Choose someone you trust to manage your finances and health care decisions.
Check and update beneficiary designations
Your will does not cover everything. Many assets, like bank accounts and life insurance policies, transfer through beneficiary designations. Review these designations on all accounts, including:
- Bank and investment accounts
- Pensions and retirement accounts
- Annuities
- Life insurance policies
Make sure to update them to reflect your current wishes. Otherwise, your ex-spouse might still receive these assets.
If you have not already, retitle any real estate to remove your ex-spouse. Also, encourage your family members to review their estate plans. They may have included your former spouse as a fiduciary or beneficiary. Ensuring their documents align with their wishes is just as important.
Divorce is challenging, but updating your estate plan does not have to be. With the right resources, you can make these changes smoothly. Consider consulting an estate planning attorney. And if you are considering remarriage, review your estate plan again.