Navigating Estate Planning After Divorce: Essential Tips
Divorce marks the beginning of a new chapter in life, and it’s crucial to update your estate plan to reflect your new circumstances. Here we will go over the basics to guide you through the key steps in updating your estate plan after a divorce.
- Update Your Estate Plan
If you previously created an estate plan with your ex-spouse, it’s important to understand that your existing trust or will may no longer be valid after the divorce. While some documents may still be legally binding, they should be revised to reflect your current wishes.
Key Documents to Update:
- Revocable Trust or Will: Typically, you’ll want to remove your ex from roles such as successor trustee, executor, and beneficiary. This ensures that your assets are managed and distributed according to your new intentions.
- Advanced Health Care Directive: Update this document to ensure that your ex no longer makes medical decisions on your behalf. Appoint new agents who will act in your best interest.
- Durable Power of Attorney: If you don’t want your ex handling your financial matters, you’ll need to draft a new durable power of attorney to appoint different agents.
- Naming a Guardian for Minor Children
If you have minor children, it’s essential to name a guardian in your will or trust. Be aware that if you pass away, your ex-spouse could potentially be the guardian unless the court deems them unfit. If your ex has issues such as addiction or abuse, appoint a trusted individual as guardian to ensure your children’s safety and well-being.
Consider setting aside funds for your successor trustee to use if they need to go to court to prove your ex is unfit to serve. This can be especially important if you want to ensure that your children’s inheritance is managed responsibly.
- Setting Up a Revocable Living Trust
To protect your children’s inheritance from potentially being controlled by your ex, setting up a revocable living trust is a wise move. This way, a trustee can be appointed to manage the funds for your children’s benefit, ensuring their inheritance is handled according to your wishes.
- Continuing with Your Estate Planning Attorney
You might wonder if you can continue using the same estate planning attorney from before your divorce. If your ex-spouse consents and signs a waiver, you can keep the same attorney. Otherwise, you’ll need to find new legal representation to handle your updated estate planning needs. At Baginski Brandt & Brandt, you will be able to work with an attorney dedicated to estate planning work after your divorce, not the same attorney who handled your divorce.
- Share Your Divorce Agreement
Your estate planning lawyer should receive a copy of your divorce agreement. This document outlines any legal obligations you may have to your ex-spouse after your death, such as maintaining a life insurance policy. Ensuring compliance with these obligations is crucial to avoid potential litigation.
- Update Beneficiary Designations
Don’t forget to update beneficiary designations on accounts that may not be distributed through your estate plan. This includes:
- Life insurance policies
- Retirement accounts (IRAs, 401(k)s)
- Payable on Death (POD) accounts
- Transfer on Death (TOD) brokerage accounts
Contact the institutions holding these accounts to request and complete beneficiary designation change forms.
- Consider a Prenuptial Agreement for Future Marriages
If you plan to remarry, consider drafting a prenuptial agreement once you get engaged. Prenups are crucial for protecting your assets and ensuring clear estate planning, especially if this is your second or subsequent marriage.
Conclusion
Estate planning after divorce can be complex, but with the right guidance, it’s manageable. An experienced estate planning attorney can help you navigate these changes smoothly. If you have questions or need assistance with updating your estate plan, feel free to contact our office.
