Divorce is one of life’s most significant transitions, both emotionally and financially, as well as legally. While most people focus on the immediate issues during a divorce, like asset division, custody agreements, and support payments, it is equally important to turn your attention to the often-overlooked estate plan.
If you already have a will, trust, power of attorney, or healthcare directive, a divorce can have a major impact on these documents. Without careful updates, your ex-spouse could remain in positions of authority or receive unintended benefits if something happens to you. If you’ve recently divorced a spouse, keep reading to learn more about how this will affect your existing estate plan and what steps you should take to protect your future.
Wills and Divorce
When writing their will, most people choose their spouse as the beneficiary. They might also appoint them as executor, the person responsible for carrying out the will’s instructions after death. In many states, a divorce revokes provisions in your will that favor an ex-spouse. However, this isn’t universal, and the way it’s handled may vary.
If your will is not updated, it can create confusion. For example, if your ex-spouse was the only person named to inherit your estate and is now disqualified through divorce, your estate could be treated as if you died intestate (without a will). Dying intestate may mean your assets will be distributed according to state laws instead of your wishes.
However, if you will name alternate beneficiaries or executors, those people may be able to step into the role previously held by your ex-spouse. During or after a divorce, it’s essential to update your will with the help of a trusted estate attorney. Reconsider who you want as your beneficiaries, executor, and any guardians for minor children.
Trusts and Divorce
Trusts are commonly used to manage assets during your lifetime and after. A divorce can affect your trust in a complex way, depending on the kind you have. If you have a revocable trust, you can usually amend this after your divorce. If you had a joint trust with your spouse, you might need to divide it or dissolve it entirely.
Irrevocable trusts can be more complicated because they are often difficult to change after they are created. If your ex-spouse is a beneficiary of an irrevocable trust, they may still have rights to you unless it is modified or dissolved. Following your divorce, review all trust documents with your attorney.
You may need to amend, terminate, or create new trusts to align your new financial and personal circumstances. While this can be difficult, it is well worth the time and effort. It will ultimately ensure your ex-spouse doesn’t have access to funds or benefits following your divorce, and they can instead go to your children, siblings, or parents.
Power of Attorney
A power of attorney (POA) gives someone legal authority to handle your financial or personal affairs if you become incapacitated. Most married couples name each other in these documents. However, after a divorce, keeping your ex-spouse in that role is probably not what you want, and this documentation needs to be updated.
Following a divorce, it is essential that you immediately revoke old powers of attorney and create new ones. Choose people you trust, like close friends, adult children, siblings, or other reliable individuals. This ensures your wishes are carried out by someone you trust in case you’re incapacitated and need their support.
Guardianship of Minor Children
If you have minor children, guardianship is one of the most important issues to address. Generally, if one parent dies, custody automatically goes to the surviving parent unless they’re deemed unfit. However, if you have concerns about your ex’s ability to care for the children, you can state your preferences for guardianship in your will.
Courts give great weight to parents’ stated wishes, although the ultimate decision lies with the judge. Having a clear, legally valid guardianship plan can significantly influence the court’s decision. Discuss your concerns with your estate attorney and update your will to nominate a guardian or consider creating a trust to manage your children’s inheritance.
Divorce Settlements and Estate Planning
Your divorce settlement agreement may impose obligations that affect your estate plan. For example:
- You might be required to maintain a life insurance policy with your ex-spouse or children as beneficiaries.
- Property settlements might affect how you structure your new estate plan, especially regarding jointly owned businesses or real estate.
Work closely with both a divorce attorney and an estate planning attorney to ensure your updated plan complies with all divorce-related obligations.
The Importance of Timing
Although you may not feel like it, it’s essential to review your estate plan during and after a divorce. In some states, you are considered legally married until your divorce is finalized. This means your spouse may still have certain rights until this is finalized. Temporary changes can help protect your wishes during the proceedings.
Once a divorce is finalized, update everything promptly to prevent unintended outcomes. Failing to revise your estate documents leaves your ex-spouse with potential power over your assets, medical decisions, or guardianship matters. By reviewing after the fact, you protect your assets and ensure that chosen loved ones have access to your accounts.
Reliable Estate Planning After a Divorce
Divorce is an emotionally exhausting process, and it’s easy to overlook the broader legal impacts. However, updating your estate plan is one of the most important steps you can take to protect yourself, your children, and your assets after a marriage ends. If you’re looking for a reliable estate planning attorney in Brigham City or Layton, turn to Bishop Estate Law for support. With years of experience helping recently divorced individuals revise their estate plans, we’re confident that we can do the same for you.
If you’d like to learn more about our estate planning services after a divorce, don’t hesitate to contact us today.