DIVORCING? DON’T FORGET TO REVAMP YOUR ESTATE PLAN AFTERWARDS.
Statistically, a first marriage in America only has about a 50/50 chance of lasting. The odds are even greater that a subsequent marriage will fail. That may be surprising to some; it may even be depressing, but it’s the truth. Should yours be one of the marriages that just couldn’t work, you certainly aren’t alone; though it may be difficult, you will need to roll with the proverbial punches and move on with your life.
Obviously, during and after a divorce, there are many things to consider. You may end up moving to a different home. If you’re a woman, you may need to decide whether to revert to your maiden name. Who will the kids live with? Which spouse will keep certain marital property? How will bank and retirement accounts be divvied up?
While many of these considerations are addressed by the judge handling your divorce case, other issues must be handled once the proverbial “cooling off” period is complete. This can include changing the beneficiaries on insurance policies or investment accounts and re-titling homes or automobiles in your name (or your former spouse’s, depending on how your marital property distribution was handled).
One key issue that many people forget after a relationship ends: revising their estate planning documents to reflect their current wishes.
KEEPING YOUR ESTATE PLAN UP TO DATE
It is a good policy to review your estate plan every few years just to make sure that the instructions you provided years ago for the disposition of your property, the potential guardians for your children and your personal wishes about whom you prefer to make important health care, financial and housing decisions for you in the event of your incapacity or illness haven’t changed. If they have, this “check-up” will allow you to make any changes to ensure that your estate plan reflects your current wishes.
A review is particularly important following a divorce or the dissolution of a domestic partnership (in a state where those are recognized). If you live in a state like Texas, though, where same-sex marriages, civil unions and same-sex domestic partnerships are not recognized, your estate planning needs might be a bit more complex, so your post-breakup revisions could end up being more significant.
Following the end of a marriage, it is likely that, unless you maintain a very close friendship with your former spouse (to the point that you would trust him or her to make life-or-death decisions on your behalf), you will need to make several key post-divorce estate plan revisions, including:
- Disposition of specific items of property that you may want to keep for your children or other relatives to ensure that they stay in the family
- Appointing a new power of attorney to make financial decisions for you in the event of illness or incapacity
- Naming new beneficiaries on any insurance policies, retirement accounts and bank accounts
- Ensuring that real property deeds are passed to your children (or other named recipient), not your former spouse
- Filing a new health care directive to grant someone decision-making authority about your medical care
Of course, estate planning is highly personal, and not everyone’s experience will be the same. Some people will basically end up with completely new estate plans, while others need only make a small tweak or two. For more information about your specific estate plan, and things you may need to reconsider before, during or after a divorce, speak with a skilled estate planning attorney in your area.