The Estate Plan Checkup You Need After a Divorce




Are you recently divorced? Among all of the changes and logistics that accompany divorce, from legal battles and paperwork to adjusting to a life without your former spouse and the emotions that may come with it, it’s common to forget one of the most important post-divorce practices: updating your estate plan. At a minimum, it’s a wise practice to review your estate plan every time there is a life changing event such as a birth, death, or marriage – but the end of a marriage merits careful review and updating of an estate plan as well. Without careful review following your divorce, your ex-spouse may end up with something, like life insurance benefits, that you no longer intended for him or her to have. The following are some of the most common provisions to review following a divorce, but it is important to review your plan in its entirety as every estate plan is uniquely created for the individual who executed it.

Upon divorce, your ex-spouse is considered to have pre-deceased you when it comes to your estate plan. That means that your ex-spouse should not receive any distribution from your will or trust. However, to make sure this provision works the way that it is intended, it is important to review all of your assets, including those that may not be in trust. Many individuals remember to update their estate plans, but forget to change the beneficiary on their life insurance policies, work sponsored retirement plans, or IRAs. Naming beneficiaries on these types of assets essentially works as a contract between the owner and whomever is providing the insurance or retirement plan. Since naming a beneficiary directly on these types of assets will control, even if there is an estate plan, the ex-spouse may end up with these benefits even though he or she is considered pre-deceased for other estate plan purposes.

Other important elements of your estate plan to review after a divorce include those sections relating to your fiduciaries. That is, who is next in line as your Trustee, Personal Representative, Power of Attorney for finances, and Patient Advocate for healthcare decisions now that your ex-spouse is out of the estate planning picture? Had you listed anyone else from your ex-spouse’s family as one of your fiduciaries? Do you still have at least three fiduciaries listed for each role? Many individuals will list three to five fiduciaries in succession for each role, to ensure that someone is specified to handle the individual’s affairs even in the event of a common accident or some type of disaster. After divorce, it is important to look at your succession of agents for each type of fiduciary role and ensure that there are still enough individuals listed, and that those individuals listed are the fiduciaries you feel comfortable with.

Similarly, it is important to review the sections of your estate plan relating to beneficiaries. Do you still have beneficiaries listed other than your ex-spouse, and are those remaining beneficiaries the beneficiaries you still wish to receive both your personal property and the remainder of your estate, including money? Do you still have contingent beneficiaries in the case that your listed beneficiaries pre-decease you? Taking the time to review the beneficiary sections of your plan will ensure that your estate goes to those whom you intend, and does not go to anyone whom you do not.

Divorce is difficult, and the last thing on many individual’s minds is updating an estate plan, but it is an essential step in ensuring that your wishes are still being carried out. To learn more about reviewing your plan after a divorce, or to make any changes in your existing plan, contact Mammel Law at 248-644-6326.

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