Divorce affects nearly all aspects of your life. A contentious divorce may have you and your ex arguing about your kids, assets, and rights. But just because your divorce is finalized may not mean you have set yourself up for success. It is also important to understand the impacts of divorce on your estate plan. You must update your estate planning documents to reflect such changes. This way, your family will be protected and all your wishes will be followed when you die. You should seek estate help to know more about how divorce impacts your estate plan.
Your Divorce Decree and Your Estate Plan
Once your divorce decree is finalized, you must update your estate plan. After your divorce, your ex will not be your personal representative. Also, it revokes the rights of your spouse to get property from your will. But a divorce decree cannot automatically fix some aspects of your estate plan. If you want to set up your estate to reflect your divorce, review the entire plan to make sure your assets are divided according to what you want when you die.
Important Estate Planning Documents
While there are automatic changes that happen when your divorce is finalized, they may not be enough to reform your whole plan to reflect the new circumstances. Thus, you must review your estate plan documents following your divorce. These include the following:
- Will. While your divorce decree revokes the right of your ex to get assets when you die, the will must be updated following the divorce. Consult with a lawyer to know the possible consequences of your will.
- Trust. A lot of people make a living trust to handle their assets instead of having a will. If your trust names your spouse, the trust documents must be amended if you don’t want to name your ex as a beneficiary or a trustee. Talk to your estate planning lawyer about reforming or dissolving a trust once your divorce is finalized.
- Retirement accounts and insurance. When you die, retirement accounts such as 401Ks and IRAs, life insurance policies, and pensions will give benefits to your beneficiaries without the probate process. If you designated your spouse as a beneficiary to any of these accounts, the divorce won’t automatically terminate such designation. Your divorce decree needs to determine the rights of every spouse when it comes to vested pensions, unvested pensions, retirement benefits, or annuities, as well as accumulated contributions in annuities, retirement systems, and pensions.
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