When going through a divorce, there will be a lot on your mind. You will most likely be focused on child custody, property division and getting your life re-established. It may not be the easiest time to add one more legal process to your plate, but it will be important to revisit your estate planning during your divorce.
If you delay or fail to update your estate planning once you file for divorce, you may be facing unintended consequences if something happens to you. Once your divorce is finalized, your ex-spouse will be removed from your estate planning automatically, however, nothing will change in your estate plan during the divorce process. Since a divorce in some cases can take a considerable amount of time to be finalized, here are a few items you should look at.
New health care proxy – It is most likely that you named your ex-spouse as your health care proxy, so if you are in a car accident or have an injury that lands you in the ICU while going through a divorce, you will most likely want someone other than your soon-to-be ex-spouse making health care decisions for you.
Change power of attorney – If your spouse has durable power of attorney, it will give them access to all your assets and accounts even if you are competent. You should revoke this power of attorney immediately, especially if the divorce is contentious.
Remove spouse as executor and/or guardian – Since you would not want your spouse to be in charge of your estate, you should remove them as executor. Though you may not be allowed to keep your current spouse from being the guardian of your children if you die, you can name an alternate guardian. This will be useful if the court determines your spouse to be unfit.
Amend your will/trusts – This is important to do since you can review what assets you are leaving to your spouse and possibly removing any items you left for members on her side of the family. Trust provisions for young children will be important. You may want to set up a revocable trust if you have minor children and name someone close to you as a trustee. Failure to do this will mean your spouse as their guardian will have access and control of your money for them if you pass away.
Review your estate plan again after the divorce – One your divorce is finalized, you should review your plan documents once again. Since much of what you previously changed may have only been for temporary measures, you should now have it completely updated. Also, you do not want to forget reviewing your beneficiary designations at this same time.
Your divorce may be stressful and adding extra duties to what you are going through may not be ideal. However, if you do not review and update your estate planning while going through a divorce, you may encounter unintended consequences that may yield results that do not fit in with your final wishes.