Divorce is a major life event. If your marriage has recently terminated, you're probably more than ready to put the arduous legal process behind you.
However, one step that many people overlook during and after divorce is updating their estate plan. Some people forget or put it off because they don't want to navigate another legal process; others assume that the divorce itself is enough to update the plan. But avoiding this crucial step after divorce can leave you--and your family--exposed to some painful and unintended consequences.
Why should you update your plan?
Failing to update your estate plan could mean that your ex-spouse continues to play a role in your life. For instance, if your divorce is not final, your soon-to-be ex may be the person contacted to make medical or financial decisions on your behalf. And even if your divorce is final and your ex no longer holds power of attorney or the role of personal representative, you should update your planning documents to name replacements.
You also risk causing confusion and unnecessary delays during the probate process if you do not update your plan. Outdated wills, for instance, can cause confusion over your intentions for what should happen with your assets. Even if state laws automatically revoke your ex's right to receive anything, you would still be wise to specify the person who should receive property in place of your ex.
In addition, you likely designated your ex-spouse as the beneficiary of your life insurance, retirement accounts, and the like. The ramnifications of failing to take his or her name off an account is an expensive problem, made even more emotionally difficult by remarriages. If it is not your intent that your ex receive the value of your accounts after you die, change your beneficiary designations now, before it's too late.
Finally, your guardianship wishes may need revision. If you pass away, your ex will likely have custody of your children, which may still be appropriate. However, consider changing your appointments if this is not the case, or if you named your former in-laws as guardians instead of someone in your own family.
Want to read more?
This Forbes article makes some solid recommendations for the specific items you will want to address in a post-divorce estate plan. In short, they include:
- Medical decision-making appointments
- Financial duties and permissions
- Beneficiary designations
Taking the added step of updating these elements of your estate plan after divorce can prove to be critical. As such, it is wise to discuss them with your attorney sooner, rather than later.