No one has divorce in mind when they step up to the altar and say the words, “I do.” However, 40-50% of marriages still end in divorce. Your estate plan changes drastically after you divorce from potential custody implications to splitting up assets and the impact of complicated tax laws. This change in status necessitates an update in your documents.
A major relationship change, such as a divorce, may not only threaten your assets, but may impact your future healthcare decisions or the assets you pass on to your heirs. By customizing your estate plan and living trust, you can rest in the confidence that your wishes, during your life and after, will be honored.
Following the next steps can help protect you and your family after your divorce:
Retain a copy of your Divorce Agreement. Ensure your estate planning attorney has a copy of your Divorce Agreement. Your attorney should be aware of all obligations you and your ex-spouse have to one another and what happens in the event of death. Your estate plan should be updated for the correct distribution of assets as well as protecting the inheritance and plans you have for your children.
Consider a plan for remarrying. Your estate planning attorney can also help you in the event of remarriage. While a prenuptial agreement may also be something to consider for the future, your updated estate plan will take into account your new spouse, any children, etc.
Update your Power of Attorney & Executor/Trustee. In the event you are incapacitated or pass away, make sure you have designated the correct executor of your estate as well as power of attorney for your healthcare decisions.
Create a plan and trust for your children. If you and your ex have divorced, do your children have a plan in place should you pass away? It’s time to consider who serve as guardian to your child(ren), as well as managing their finances until they turn eighteen.
Double-check your beneficiaries. After a divorce, it is imperative you assign the correct beneficiary to your retirement accounts such as your life insurance plan, 401k, and IRA. You can avoid unnecessary litigation and complication by making sure you have the correct person in place before the need for them arises.
A savvy estate planning attorney will take into account your individual situation and ask questions to customize your trust to your wishes. Not all trusts are created equal, and a good trust protects you against creditors, predators and yes, divorce too. For more information, contact our team today or attend one of our FREE seminars for a FREE consultation with an attorney.
