5 Estate Planning Changes You Should Make After a Divorce
Divorce changes many aspects of your life, including your finances, your family structure, and your long-term plans. One area that is often overlooked after a divorce is estate planning.
Many people assume their divorce automatically updates their will or removes their former spouse from important roles in their legal documents. In reality, that is not always the case. Failing to update your estate plan after a divorce can create confusion, unintended consequences, and even legal disputes.
Here are five important estate planning updates to consider after a divorce.
1. Update Your Will or Trust
One of the first steps after a divorce is reviewing your will or trust. If your former spouse was named as a beneficiary or executor, those provisions may no longer reflect your wishes.
While some state laws automatically revoke certain provisions in favor of an ex-spouse, relying on those laws can create uncertainty and complications for your loved ones. Updating your will or trust ensures that your assets are distributed according to your current intentions.
2. Change Your Beneficiary Designations
Many assets pass outside of your will or trust through beneficiary designations. These include:
Retirement accounts such as IRAs and 401(k)s
Life insurance policies
Payable-on-death bank accounts
Transfer-on-death investment accounts
These designations typically override what is written in a will. If your former spouse is still listed as the beneficiary, they may still receive those assets unless the designation is updated.
After a divorce, it’s important to review each account and make sure your beneficiaries reflect your current wishes.
3. Update Your Power of Attorney
A financial power of attorney allows someone to manage your financial affairs if you become incapacitated. Many married couples name each other for this role.
After a divorce, you will likely want to appoint a different person to act on your behalf. This might be a trusted family member, close friend, or adult child.
Without updating this document, your former spouse could still have legal authority to make financial decisions for you if you become unable to manage your own affairs.
4. Update Your Health Care Directive
Health care directives and advance medical directives often name a spouse as the person responsible for making medical decisions in an emergency.
If your former spouse is still listed as your health care agent, they may remain the person authorized to make critical medical decisions for you. Reviewing and updating this document ensures that someone you trust is in that role.
5. Revisit Guardianship and Trust Planning for Children
If you have minor children, your estate plan should address who would care for them if something happens to you.
After a divorce, you may want to revisit:
Guardianship nominations
Trust provisions for children
How and when children receive inherited assets
A trust can help ensure that assets intended for your children are managed responsibly and protected until they reach an appropriate age.
Final Thoughts
Divorce is already a significant life transition, and estate planning may not be the first thing on your mind. However, taking the time to review and update your documents can prevent unintended outcomes and ensure that your wishes are clearly reflected going forward.
A few thoughtful updates can provide peace of mind and help protect the people who matter most to you.
If you recently went through a divorce and are unsure whether your estate plan still reflects your wishes, it may be worth reviewing your documents with an estate planning attorney.
Prefer to speak with someone directly? Call us at (410) 864-6395. We’re happy to help.
