Signing new estate planning documents during a divorce.
Divorce can throw your life into turmoil, both emotionally and financially. When you are in this tumultuous period, the focus may be on stabilizing daily life, and less on long term estate planning. However, updating these documents in a timely manner is important to ensure that your current status is reflected in your wishes.
Most couples who make an estate plan do so as a unit, naming each other as the primary decision maker, power of attorney, beneficiary, and heir. It is likely that this plan will no longer fit your current situation once you separate from your spouse.
Your marriage is still legally binding until the final divorce paperwork has been signed by a judge, so throughout the process, any estate plan in place will be carried out as if you are still married. Once your divorce is finalized, most states will revoke any will made during your marriage. It will be as if you had never made a will at all. This probably won’t fit your needs either.
There are several changes you need to make to reflect your new situation.
First, revoke your current will or trust and make a new one. Most likely, your old will or trust named your spouse as your primary beneficiary. Many married couples name their spouse as their executor, and in the case of a divorce, this may no longer be the option you want. Rather than revising, it’s best to start fresh, naming new beneficiaries, a new executor, and focusing on your current assets. You will also need to name a new person to have power of attorney in case it is needed.
In most cases, if custody is shared, guardianship will pass to the remaining parent in the case of your death. Yet it is still important to name a guardian, in the event that your ex-spouse is either not available, or you have a strong reason to feel they should not have full custody. Although it is rare in most cases for the surviving parent to be denied custody, a judge will still consider your wishes.
You will also need to name a new beneficiary for your accounts, such as life insurance, retirement accounts, and other financial accounts. Request the documents from the institutions, name a new beneficiary, and submit them as soon as possible.
Ideally you will make these changes as soon as you are certain that the relationship is over. However, if a divorce has been filed the divorce court can stop you from making certain changes to your estate, including making gifts, designating beneficiaries and transferring funds. It is a good idea to have an attorney who knows both divorce law and estate planning so that you don’t run afoul of either set of laws. If you have questions about this or other matters and questions regarding your divorce, contact my office today.
Divorce can create a time of emotional and logistical chaos and uncertainty. By making sure your legal and financial documents are in order and reflecting your new life, you can feel in control of that portion of your life as you transition.