Divorce is not only a significant event emotionally and practically, it is also a significant legal event. If you are divorcing your spouse, the ways in which you are connected in the eyes of the law will soon be severed. Yet, not every way in which you’re connected to your spouse will be addressed automatically. Sometimes, you need to take action in order to disentangle your legal interests from your spouse’s.
This is one of the reasons that it is important to update your estate plan both while you’re divorcing and after your divorce is finalized. Many people overlook the need to update their estate planning documents during and after a divorce, which can lead to unintended consequences. Failing to revise your plan could leave your ex-spouse with control over critical decisions or access to assets you no longer wish them to have.
What documents might you need to update?
There are a number of documents that may need to be addressed during or after your divorce process. For starters, if your will designates your ex-spouse as a beneficiary or executor, these provisions may remain valid until your divorce is finalized. Should anything happen to you before your divorce is complete, updating your will can help you to ensure that your current wishes are respected.
Next, if you and your spouse created a joint living trust, you’ll need to divide the assets and potentially create a new, individual trust. Similarly, if your ex-spouse is named as the trustee or beneficiary of your individual trust, those designations should be reviewed and revised.
Additionally, powers of attorney for financial and healthcare decisions often feature a spouse as the agent. After you divorce, you’ll likely want to name someone else you trust to make decisions on your behalf if you’re incapacitated.
Similarly, life insurance policies, retirement accounts and other financial assets often require distinct beneficiary designations. These take precedence over what’s written in a will, so it’s important to update them as soon as possible to prevent your ex-spouse from inheriting these assets.
While updating your estate plan can be stressful, it is an effort that is both necessary and well worth your time during and after divorce.