What You Should Know About Divorce and Estate Planning

Going through a divorce is very traumatic. There can be hard feelings. There are dozens of difficult decisions to be made and papers to be signed. It creates a serious disruption of your life and it may take you time to recover. During this stressful time some things may be overlooked. You must not overlook your estate plan.

Your estate plan is designed to allow you to maintain control over what happens to you, your loved ones, and your assets in the event of disability and after your death. If you do not update your plan during, or soon after, your divorce, you may no longer be in control. Your original plan was created under a specific set of circumstances that have changed. Maintenance and updating of your plan is necessary and critical to providing for your loved ones and ensuring that you do not leave them a big mess.

Whether you realize it or not, you have an estate plan, or at least some parts of a plan. Included in your estate plan may be the well known estate planning tools - the will (it may be the State’s will if you have not executed one) and durable powers of attorney. You must also consider your life insurance policies and retirement accounts.

Should I Do Anything Before the Dissolution Is Final?

If you die before the divorce is final and you do not have a formal estate plan, your spouse is entitled to part of your property. Life insurance policies and retirement accounts are controlled by beneficiary designations, and if you are like most people, your spouse is probably named as the primary beneficiary.

If you have a formal plan in place (Will, Trust, Durable Powers of Attorney) the plan will control. But, you have most likely named your spouse as your primary beneficiary, trustee, personal representative, financial agent, and health care agent.

If you no longer want your spouse to share in your estate, you will either need to amend your estate plan or create a formal plan. You should also change the beneficiary designations for your retirement accounts and life insurance policies. You will need your spouse’s consent if you do not name your spouse as the primary beneficiary for your retirement accounts.

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