Estate Planning After Divorce
Are you recently divorced? If so, you probably do not want to see a judge, an attorney, or the inside of a courtroom for a long time. Going through a divorce can be painful, frustrating, and stressful. Many times parties are simply glad that the divorce is final and they can move on with their lives. However, they forget one very important detail – estate planning after divorce.
Estate planning after divorce is extremely important. You may have severed your financial ties to your ex-spouse through your divorce but if you fail to update your estate documents, your ex-spouse could potentially be in control of your estate. In most divorce situations, that is not something either party would like to happen.
Doesn’t My Divorce Void Any Provisions in My Estate for My Ex-spouse?
No, your divorce proceeding does not change your estate documents. Your estate and your divorce are two separate legal matters. You must take steps to update your estate plan and change your estate documents to ensure that your ex-spouse is not the beneficiary of your estate, the administrator of your estate, or your power of attorney.
Below is a checklist of documents you should review and update as part of your estate planning after divorce. However, this list is not comprehensive and you may have other documents you need to review depending on your specific circumstances.
- Your Will
- Revocable Trusts or other trust agreements
- Healthcare powers of attorney
- Living Wills
- Durable Powers of Attorney or other powers of attorney
- Life insurance beneficiaries
- Irrevocable Life Insurance Trusts
- “Pay on Death” provisions for bank and financial accounts
- Beneficiary designations for 401k plans, individual retirement accounts, health savings accounts, annuities, and other retirement plans
Do I Need To Update The Appointment Of A Guardian For My Children?
Most parents include a section in their will appointing a guardian for their children should both parents die while the children are still minors. In most divorce cases, if one parent dies the other parent becomes the sole legal guardian for any minor children. While you can certainly designate a guardian other than your ex-spouse in your will, this will not be binding on the court.
However, if your ex-spouse is an unfit parent, you should definitely update your will and designate a guardian other than your ex-spouse. The court may give more weight to your designation if your ex-spouse has been judged as an unfit parent.
Should I Appoint A Person To Manage My Child’s Inheritance?
Unless your ex-spouse is unfit, he or she will probably receive sole custody of your children; however, you are not required to appoint your ex-spouse to manage your child’s inheritance. If you do not appoint a trustee to manage your child’s inheritance until your child reaches the age of 18 (or the age that you designate in your will), your ex-spouse will manage your child’s inheritance as the child’s guardian.
By appointing a trustee in your will to manage your child’s inheritance, you prevent your ex-spouse from controlling your child’s inheritance. For many divorced parents, having your ex-spouse manage your child’s inheritance may not be an issue; however, if you feel your ex-spouse is not fit to manage the inheritance or you simply do not want your ex-spouse to have control over your child’s inheritance, you have the right to name another person to serve in this capacity.
What Should I Do About Jointly Owned Property?
During a divorce, the court approves a property settlement agreement or orders a division of the marital property, including property held under joint tenancy. In most cases, the judge orders one spouse to sign over his or her right or title to jointly held property to the spouse receiving the property in the divorce settlement.
However, you should always review all assets that are held under joint tenancy to ensure that your ex-spouse has executed the proper documents to transfer his or her interest to you according to your divorce settlement. This should be done as quickly as possible following the divorce. If you die before severing the joint tenancy, your ex-spouse will automatically receive full ownership of any property held under joint tenancy.
Act Now to Avoid Problems with Your Estate Planning After Divorce
If you have any concerns about your ex-spouse being involved in your estate, you should discuss this with your divorce attorney. You should also discuss your concerns with a qualified estate planning attorney. An estate planning attorney will help you ensure that your ex-spouse is completely removed from all aspects of your estate.