Creating an estate plan and getting a divorce are both huge life events, but many people do not realize that they are connected. During a divorce, there are probably a million different things going through your head, but is estate planning one of them? If not, it should be.
Divorce and estate planning are linked and each influences the other. If you get divorced, there are a few crucial estate planning moves you will need to make. Here are three important steps to take to make sure your estate plan is still effective after a divorce.
Figure out what you can and should change
Chances are you will want to make some changes to your estate plan after a divorce. That means first and foremost you need to figure out what you can change. In some states you cannot change the beneficiary of life insurance, retirement plans or pensions until after your divorce.
You should also consider what you want to change. If you have most of your assets and decisions going to your soon-to-be ex, you may want to update your will, amend some trusts and change your designated directives. Carefully consider what assets you want to adjust and who you might want your directives to shift to.
Update your will
There are a few changes you should make to your will. You should remove your current spouse as executor so they are no longer in charge of your estate. You should also consider whether or not you want your current spouse to be the sole guardian of your children.
Update your directives
Most people give their spouse power of attorney and name them as their health care proxy. After you get a divorce, you will probably want to change these powers so your current spouse does not have the ability to make decisions for you anymore. After removing this person from your plan, you should also name a new person as soon as possible.
Making changes to your estate plan might not be your first thought when you decide to get a divorce, but it is no less important than other parts of divorce. Do not let your estate plan become irrelevant after your divorce.