According to D.A. Davidson & Co., only around 34% of adults in the U.S. have an estate plan in place. Divorce is one of those major life changes where you will need to make several changes in your estate plan to reflect your new single status.
Ending your marriage can impact your estate planning in various ways, requiring careful consideration. To ensure you do not overlook anything, explore the aspects that demand your attention.
Review Beneficiaries and Heirs
In your current plan, your spouse is likely a beneficiary and heir. You should go through all your accounts and situations mentioning your spouse and update them. Failing to do so could mean that if you pass away, your spouse would still be entitled to anything outlined in the plan.
Adjust Assets
Following your divorce, you probably own fewer assets. It is a wise move to review your estate plan and remove any items that you lost during the divorce. You might also need to alter details in other accounts. For instance, if the court instructed you to split half of your retirement savings with your ex-spouse, ensure your estate plan accurately reflects that.
Revoke Authority
If your estate plan includes a living will or power of attorney naming your spouse as someone who can make decisions on your behalf, it is essential to update those documents. There is a special circumstance where this might not apply – if you and your ex-spouse still have a good relationship. However, it is generally not advisable to have your former spouse making decisions for you.
When you are making changes to your estate plan, it is important to follow the proper procedures. Ensuring that any alterations you make would stand up legally in case of a challenge in court is of utmost importance.