Going through a divorce is difficult, and it can change many aspects of your life. Your finances may have changed, or you may have new assets that you’d like to preserve that are now in your name alone.
Financial planning after your divorce should include reviewing your estate plan to make sure it still offers you the best protection. In fact, you may need to go back to your estate plan to remove your ex-spouse as a beneficiary or health care proxy, for example, which is why a review is important as soon as possible.
What can happen if you don’t update your estate plan after a divorce?
If you don’t update your estate plan after your divorce, one of the things that could happen is that your ex-spouse could stand to inherit your assets if you pass away. Some people will leave their estate plans alone intentionally to allow that to happen, but if you don’t want your ex to get assets when you pass, then you should remove them as a beneficiary.
You need to look at all aspects of your estate plan to address any areas in which your ex-spouse may have stood to benefit. For instance, if they are listed as a beneficiary on your life insurance or are the beneficiary of a revocable trust, you can update those legal documents to make someone else your beneficiary instead.
Additionally, if you leave your ex-spouse as your health care power of attorney or executor, they could be in charge of what happens if you can’t make your own medical decisions or pass away and need someone to handle the estate. If you would prefer not to have them making those decisions, then it’s time to go back and review your estate plan and to remove them from those roles.
You should review your estate plan as soon as you can after your divorce. Remember, if there are any court orders affecting your estate plan, then those orders still need to be followed. You do have the option to update other aspects of your estate plan, though, so that you still benefit from it and have a good plan for the future.
