When going through a divorce, there are many things you must end up updating or changing because of your decree. While the most common things like bank accounts, retirement beneficiaries, life insurance beneficiaries, and other assets are changed immediately, estate planning often gets overlooked. You don’t want to end up in a predicament when you need somebody to help make decisions on your behalf just to find out it is still your ex-spouse that is named as your agent for power of attorney.
While most estate plans include clauses that cover events such as divorce, your estate plan will not cover all bases in the event you and your spouse split up. Keep in mind that if you established an estate plan during marriage, chances are that with the marriage changing so is your estate plan. Here are some of the following takeaways you should consider when reviewing your documents after your divorce is finalized:
Double Check Your Beneficiary Designations
Beneficiary designations should be frequently reviewed, even if you are not going through a divorce. Beneficiary designations on financial accounts rule over what you state in your Will. This means that if you change the beneficiary on your Will for a bank account from your ex-spouse to someone else, but not your beneficiary designation within your financial institution, that the funds in your account could be transferred to your ex-spouse rather than the new beneficiary listed in your Will. It is always best to review your beneficiary designations on any financial account you own (checking, savings, retirement, investment accounts, etc.), especially when you encounter a drastic change in your life.
Plan For Your Children
As your marriage and life change, so will your children. They will grow up, find their own interests, and begin planning for their own future. If you established an estate plan early in their life, it is best to review your existing plan and update it according to their current situation. Has one of your kids grown to not handle money appropriately? Do you now have grandchildren? Now that your property has been separated by your divorce decree, how do you plan on distributing it upon your death? What if you do not like your child’s spouse? Do you plan on getting remarried? If you do, what about if there are step-children involved which results in a blended family? These are all things to consider when updating your estate plan post-divorce. You should always meet with an estate planning and elder law attorney to discuss which options are available to you to best protect your loved ones.
Updating Your Power of Attorney
Updating your power of attorney (both statutory durable power of attorney and medical power of attorney) is crucial upon a divorce. Your powers of attorney are the documents that allow someone else that you have appointed to make decisions on your behalf in the event you are unable to do so. Most of the time, people do not want their ex-spouse to be the one making the decisions for them. If you do not update your power of attorney, and it is known you do not want your ex to serve as your agent; then it could lead to costly contested guardianship.
Allow Your Attorney to Review Your Divorce Decree
When your divorce is finalized and you can obtain a copy of the decree, it is always a good idea to have an estate planning attorney review your existing documents along with the decree itself. This will allow the attorney to give you the proper guidance on what should be updated to reflect the changes that have occurred. It is also important to note that revoking your existing documents prior to making changes and signing your new ones may not always be a good idea. Revoking existing documents before the execution of a new or updated estate plan can leave you vulnerable to a costly probate (and do not forget about guardianship) matter. Remember, you can update your estate plan at any time; even before your divorce is finalized, but it may be best to wait until the decree states the results of the divorce.
Hegwood Law Group knows what to look for when updating documents when you go through changes that may occur throughout your life. Serving the Houston area for nearly 25 years, Hegwood Law Group is ready to assist you in protecting your loved ones. To schedule a strategy session, call us at (281) 885-8826 or click here to schedule online today.