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Don’t neglect your estate plan after a divorce

On Behalf of | Sep 2, 2016 | Trusts |

If you’ve just gone through a divorce, the last thing you might want to do is drag up old memories by revising your estate plan. Trust us, though, if you don’t take the time to do this, you could seriously regret it.

Once the proverbial ink has dried on your divorce decree, and the judge has approved and signed off on everything, you should take a long, hard look at the entirety of your estate plan. This is especially true if the planning was done while you were married (as is the case for most couples).

Every aspect of your estate plan needs to be examined and likely changed, including:

  • Trusts where you named your partner (or an in-law) as either trustee or beneficiary
  • Powers of attorney, both financial and medical
  • Advance directives/living wills where your now former spouse was named as the person to make important medical decisions on your behalf
  • Life insurance policies
  • Retirement accounts
  • Investments/stock portfolios

The reason for this is simple: unless your divorce was amicable and you can wholeheartedly trust your former spouse to both inherit your assets and make important decisions on your behalf, you will need to ensure that those things don’t happen. Even if your thoughts on asset distribution haven’t changed as a result of the divorce, you could still need to restructure gifts and bequests to avoid estate tax issues that could arise. This is because you will no longer have the financial benefit offered by federal estate tax laws exempting transfers between spouses; if you have a particularly large estate, there could be tax consequences now.

In addition, if for example, your divorce was particularly contentious, you likely don’t want to leave the legal framework in place that would allow your ex to decide on life-sustaining care for you in the event of an accident or illness.

Likewise, if you should remarry, you will most certainly want your new spouse to inherit your assets and make important medical and financial decisions instead of your former spouse. If you don’t go through the process of updating these important documents, though, that might not happen.

Whenever you are ready to get started on drafting an estate plan for the first time or updating an existing one to reflect your changed life circumstances, consult an experienced estate planning attorney in your area.