Estate Planning for The Divorced
If you are going through a divorce, or are recently divorced, the last thing you want to do is start another legal endeavor. However, if you already have an estate plan, you should carefully consider whether or not any of those documents need to be updated in light of your recent divorce. Many estate litigation cases happen as a direct result of someone not taking the time to update their estate planning documents after a divorce. If you are wondering what to do after your divorce regarding your estate plan, consider visiting with an experienced estate planning attorney for the divorced at Ibekwe Law, PLLC at 512-505-2753 to help ensure your legal documents represent your wishes.
Changing Estate Planning Documents After Divorce
Some estate planning documents need to be created after a divorce, while some estate planning documents need to be changed after a divorce. If left alone, the estate planning documents you already have executed, or the state’s intestate laws will determine how your assets are distributed, which may be against your wishes. While every person will have a different set of facts and circumstances, the following estate planning documents are often updated or changed after a divorce.
Last Will and Testament
In many cases, if a spouse has a Last Will and Testament (Will), it names the former spouse as the beneficiary for all assets and property. The best course of legal action if a spouse wants to change the beneficiary in their Will is to simply revoke the current Will, and execute a new one according to their wishes. The execution of a new Will allows a divorced person to then choose the beneficiaries they want to receive their assets and property. Additionally, executing a new Will allows a person to choose a person to be the legal guardian for their child. It is important to note that if the former spouse is the other parent to a minor child, they may have legal rights that have priority over the designation of a guardian in your Will. Visiting with an experienced estate planning attorney at Ibekwe Law, PLLC can help you better understand all of your legal options for your Will after your divorce.
There are many different types of trusts, both revocable and irrevocable, according to the Federal Deposit Insurance Corporation. Additionally, there are living trusts, special needs trusts, and other types of trusts that can be created to ensure that minor children or special needs family members receive financial support after your death. In some cases, a trust is a better option legally than a Will, and in other cases, a Will and a Trust can be used in combination with each other to accomplish the wishes of the person creating their estate plan.
Financial Power of Attorney
If you become incapacitated during your lifetime due to illness or injury, you may have a durable power of attorney documents that list your ex-spouse as the person allowed to make financial decisions on your behalf. You may wish to appoint a different person to make those financial decisions for you if you become unable to do so for yourself.
Medical Power of Attorney
Similar to a financial power of attorney, a medical power of attorney appoints an individual to make health-related decisions if a person remains unable to do so for themselves. If you are divorced, you may want to update your healthcare power of attorney to be someone different than your ex-spouse.
Along with all of the legal documents listed above, if you are divorced, you will also want to make sure to update all of your beneficiary designations in your legally binding documents. Some of these beneficiary designations may occur in retirement plans, annuities, payable on death beneficiaries, transfer on death account beneficiaries, pension plans, bank accounts, life insurance policies, real estate documents, car title documents, or any other account that will transfer money or assets upon your death.
Important Facts to Consider Regarding Estate Planning for the Divorced
There are some important facts to consider if you are in the process of getting a divorce, are recently divorced, or have been divorced a considerable amount of time, including the following:
- You have the legal right to change many estate planning documents at any time, even in the middle of a divorce process or legal separation. However, you do not have the legal right to either transfer or hide any asset or property (either separate or communal) in preparation for, or during a divorce. Additionally, funding of any type of trust is not allowed during the divorce process as well. Any type of estate planning activity that would direct financial assets away from your spouse will not be allowed under the law.
- You may not, during the process of a divorce, either cash-out or borrow assets against any kind of insurance policy.
- You do not have the right to change a retirement plan beneficiary from your spouse (or ex-spouse) to another person prior to the final divorce judgment.
- You have the right to change the passwords on any online accounts or financial documents that you alone have a legal right to possess.
- If you ever consider remarrying, you may want to sign a prenuptial agreement in order to ensure that your estate planning documents and all assets are both handled and distributed according to your wishes.
Contact an Experienced Estate Planning Attorney Today
If you are preparing for a divorce, or are already divorced, you want to ensure that your financial estate is protected after your death and your assets are distributed according to your wishes. What to do after divorce often does not immediately bring to mind estate planning. However, visiting with an experienced estate planning attorney today at Ibekwe Law, PLLC at 512-505-2753 can help you ensure that you have peace of mind regarding all of your estate planning matters.