While a divorce might seem like the end of one chapter of your life and the beginning of another, it is wise for individuals to examine all aspects of the end of the relationship. For example, many married couples will make all financial decisions as a team. Now that the partnership has ended, it is crucial that each individual takes a careful look at his or her own personal financial future. In general terms, an estate plan must be revised.
It is important to thoroughly examine all aspects of the estate plan, here are five specific factors that should be revised or modified.
- Update powers of attorney including a health care proxy: Power of attorney is given to an individual to make financial or medical decisions should you become incapacitated. Generally, spouses name each other. After a divorce, however, it might be a better idea to have a friend, family member or trusted advisor to act as your agent regarding these decisions.
- Revise your will and trust: This will likely take some time if you want to completely remove your ex-spouse from the documents. Removing an ex as an heir, trustee or executor might take some effort, but you gain the peace of mind knowing you again have complete control over the estate or trust.
- Revise guardianship and trusts for minor children: Depending on how the relationship and divorce went, you might indeed choose to name your ex as a guardian in your will. If the relationship turned toxic, however, you might choose to name other trusted individuals to fill these crucial roles.
- Review life insurance requirements: Many divorce orders and negotiations will include life insurance obligations. It is important to fully understand your obligations before making changes such as removing your ex as a beneficiary.
- Retirement plan beneficiaries: Similar to your life insurance policy, it is important to review your retirement or pension plans to ensure the proper beneficiaries are listed. If an obligation is listed in the divorce order, it is imperative that you ensure these steps are followed in the paperwork.
With questions regarding your divorce or the necessary changes to your estate plan, we encourage you to discuss your goals with an experienced family law attorney.