Tips for Estate Planning After Divorce

Getting through a divorce can be rough. Divorce is expensive, time consuming, and emotionally draining. While it might seem daunting to add another task to the list of decisions you need to make, re-working your estate plan after a divorce is very important. While a divorce is ongoing, your current spouse will maintain some rights. Your goal is to keep as much control over your assets while still meeting your legal obligations. After divorce, it is a good idea to go through your estate plan and make necessary changes. Here are five important estate planning changes to consider after a divorce.

1. Health Care Proxy

Your health care proxy is the person who will be making big health care decisions for you in the event that you become incapacitated. By default this is often your spouse, but you may even have a signed health care proxy indicating your spouse as the person in charge of these decisions. You should change your health care proxy as soon as you can to ensure someone you truly trust is making these major medical decisions for you.

2. Power of Attorney

A power of attorney allows someone to act on your behalf for all legal or financial matters if and when you cannot do so yourself. If you had an old power of attorney document naming your ex-spouse, you should get it revoked and if necessary provide notice to your ex-spouse. You will also want to execute a new power of attorney wherein you name a relative, trusted friend, or legal advisor as your designated agent for your assets. Especially if a divorce is not amicable, you will want to do this as soon as possible.

3. Guardianship

This can be tricky. In the event of your death, your ex-spouse would very likely become the guardian of any minor children you share. You can choose to name them as the guardian in your will, but if there is a question of your ex’s fitness as a parent, things can get a little more complicated. You can name someone other than your ex-spouse as the guardian of any minor children. However, should your former spouse seek custody after your death, your designated guardian will need to prove in court that the ex-spouse is unfit. This often means leaving behind a sum of money for your designated guardian to cover litigation costs.

4. Will and Trustee

If you do not want to leave anything to your former spouse, it is important to remove the provisions for such from your will. If your ex is listed as the executor or trustee of your will, you will need to change this. You need to make sure he or she does not receive any of your assets and has no control over your will once you’re gone. In addition to this, if you are designating a minor child as the recipient of any of your assets, your ex will have control of your child’s finances until they turn 18. To avoid your ex-spouse gaining access to this money, you should set up a revocable trust naming someone of your choosing as the trustee to access these assets on behalf of your children.

5. Beneficiary Designations

People often forget about their beneficiary forms. Make sure that your 401(k), IRA, and life insurance beneficiary designation forms are consistent with the terms of your divorce agreement. If you do not make these changes, it can lead to litigation troubles for the person who should be receiving these benefits in the event of your death. Even if you still want your former spouse to remain the beneficiary, you should update this designation after the date of divorce and leave a letter explaining your intentions.

If you have recently gone through a divorce, one of the first things you need to do is get your divorce agreement into the hands of your estate planner. They will be able to ensure you are meeting your legal and financial obligations to your former spouse while still protecting your assets. Veitengruber Law provides full asset protection and estate planning services, and our personalized strategies can help you plan long-term for all stages of life.

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