Going through a divorce is not easy, even when you are certain of your decision. Often, the strong emotions that are associated with the divorce process overshadow the practical ramifications of the divorce that really should be addressed. With that in mind, the Grand Forks estate planning attorneys at German Law point out updates to your estate plan that typically follow a divorce.
Routine Reviews and Revisions of Your Estate Plan
One of the most common estate planning mistakes people make is forgetting about their plan once an initial plan is in place. Sometimes, failing to update your estate plan can be more detrimental to the disposition of your estate after your death than not creating a plan in the first place. Be sure you take the time to update your estate plan every three to five years during your working years and every five to ten years after you reach retirement age as a matter of routine. In addition, life events such as a divorce call for a more immediate review and revision of your estate plan.
The Importance of Updating Your Plan Post-Divorce
Most married couples create estate plans that reflect their marital status. For instance, your spouse is likely the beneficiary of many assets and you probably hold some assets jointly. Some married couples have estate plans that are even more intertwined. You may also have appointed your spouse to important fiduciary and/or decision-making positions within your estate plan. All of that makes sense while you are married, particularly if you have children together; however, if you decide to end the marriage you should update your estate plan to reflect the change in your status as soon as possible after the divorce is final. After all, you probably don’t want your now ex-spouse to be the beneficiary of your life insurance policy (unless it is as the Trustee for your minor children) nor do you want him/her to inherit your estate assets. Worst still, imagine failing to update an advance directive that appoints your spouse as your Agent for making health care decisions for you in the event your incapacity prevents you from making them yourself? Always consult with your estate planning attorney before making any changes to your estate plan that are the result of a divorce because the divorce laws in your state may require you to maintain the status quo until the divorce is final; however, the following five are common updates that you will likely need to make:
- Updating your Will. Along with removing your spouse as a beneficiary under the provisions of your Will, you may also need to remove him/her as the Executor of your estate and appoint someone new to the position.
- Amend a trust agreement. A trust is a very popular addition to the average estate plan. If your plan includes a trust, and you appointed your spouse to be the Trustee of the trust, you may need to amend the trust agreement to appoint a new Trustee.
- Changing beneficiaries of life insurance. Your spouse is also likely the primary beneficiary of your life insurance policies. Before changing this, make sure that your divorce decree does not require you to continue to maintain life insurance that names your spouse as the beneficiary as is frequently the case when minor children are involved.
- Terminating a Power of Attorney. At some point you may have executed a Power of Attorney naming your spouse as your Agent. You will want to terminate the POA as soon as possible.
- Changing your Agent under an advanced directive. If you have an advance directive in place, you probably named your spouse as your Agent, giving him/her the legal authority to make health care decisions for you if you are unable to make them at some point. Executing a new one naming someone else as your Agent should resolve this problem.
Contact Grand Forks Estate Planning Attorneys
Please join us for an upcoming FREE seminar. If you have additional questions or concerns about updating your estate plan post-divorce, contact the Grand Forks estate planning attorneys at German Law by calling 701-738-0060 to schedule an appointment.
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