Estate planning is not only for married couples. If you’re getting divorced, especially if you have children, creating or updating your estate plan should be on your “Mission Critical” list. Here are five considerations if you’ve recently divorced or are in the process when it comes to estate planning.
YOUR WILL
It is a very good idea to review your will as part of your estate plan if you’re getting divorced, for obvious reasons. I know getting divorced can be highly stressful, and dealing with more legal stuff is not what you want to do – but do it anyway. It’s important. It should take too long to make any necessary changes based on your new marital status.
BENEFICIARIES
Update beneficiaries of your investments, insurance, 401k, retirement plans etc., as needed. Don’t assume your divorce will automatically override beneficiary designations made during your marriage. In some states, the divorce revokes prior beneficiary designations, but in others, it doesn’t. Your best bet is to make your updates in a timely fashion. One caution, be sure to discuss this with your attorney if your divorce is not yet final.
MEDICAL DIRECTIVES
When reviewing your estate plan after (or during) your divorce, your medical directives may need to be updated. For example, if your spouse was the designated individual to whom healthcare providers were to turn in the event you had become incapacitated and could not make your own decisions, you may want to update that designation.
GUARDIANSHIP
If you have a minor child, nominating a third party as a guardian and trustee of the child’s estate might be wise. Unless you do so, the former spouse, as the surviving parent, will become the guardian of the child’s estate and their inherited assets. Maybe you’re ok with that, maybe not.
Also, if you already had designated a guardian before, it might be a good idea to review that decision now, especially if that person is your former’s spouse’s relation.
JOINTLY HELD ASSETS It is likely that some of your assets are jointly held. So if you are getting divorced, it’s a good idea to review what’s included, such as real estate, vehicles, stocks and bonds, and joint bank and brokerage accounts. One presumes you won’t want your former spouse to be the surviving beneficiary of those assets.
Estate planning when you’re getting divorced is not difficult. If you already have a plan, it is simply a matter of updating it in keeping with your new marital status. Like any significant life event, marriage, spouse death, retirement, etc., your estate plan should reflect your current situation. This is why I offer my clients a complimentary review of their estate plan every three years to ensure it is in step with your life. Whatever your current situation, I would be happy to help you update or create your plan. My goal for my clients is to always help them protect their hard-earned assets and their loved ones. Please visit my website, www.davidlefton.com, for more information or to schedule a consultation. If you prefer to talk first, call me at 513-399-7526.