The divorce rate amongst those over the age of 50 is on the rise. This poses a unique set of issues, including the impact of the divorce on estate planning. Three specific ways divorce can impact estate planning considerations in these situations include:
- Contention. According to a recent survey by TD Wealth, a retirement investing firm, family conflict is the top issue that causes problems during administration of the estate. Add gray divorce to this equation, and the survey results found family conflict that comes with estate administration is escalating.
- Power of attorney. This legal tool allows the creator to designate another to manage matters on their behalf. Those who are going through a divorce, or who are recently divorced, are wise to review this document and update it as needed. A failure to do so can result in an unwanted individual making important decisions in the event the creator becomes incapacitated.
- Beneficiary designations. In some situations, an account has a beneficiary designation. When creating the account, the financial institution used for the account has the creator list one or more individuals as beneficiaries. This is common with savings and retirement accounts. As a result, it is important to review these documents and update the designation after a divorce is finalized.
The time that follows a divorce can be tumultuous, or it can be viewed as an opportunity to review your current financial and estate matters and set them up for future success. Taking the time to implement this latter viewpoint can help those in this situation start their post-divorce lives with clarity and renewed purpose.