Divorce is one of those life events that can shake things up in ways you might not have anticipated. Aside from the emotional rollercoaster and the practical logistics of separating, it also forces you to rethink your financial future—starting with your estate plan.
Whether you’re newly divorced or just coming up for air after the dust has settled, revisiting your estate plan is essential to ensure that your assets go exactly where you want them to.
Here’s a quick guide on the key changes you should consider making to your estate plan after a divorce.
1. Update Your Estate Plan!
Your estate plan is the roadmap to how your assets are distributed after you're gone, so you definitely don’t want to leave it untouched after a divorce. If your ex is still listed as your primary beneficiary, they could end up with a bigger slice of the pie than you intended. Take the time to revise your plan, removing your ex-spouse (if that’s what you want) and possibly adding new beneficiaries, like children, relatives, or even a charity.
2. Revisit Your Power of Attorney
Did you name your ex as your power of attorney? If so, it’s time to rethink that decision. This document gives someone else the legal authority to make decisions on your behalf, so you’ll want someone you trust implicitly. Post-divorce, that might mean appointing a close friend, sibling, or even an adult child, depending on your circumstances.
3. Change Beneficiaries on Life Insurance and Retirement Accounts
Life insurance policies, retirement accounts, and other payable-on-death (POD) assets are often overlooked when people think about their estate plans. But here’s the thing: these accounts are usually separate from your will, meaning whoever is listed as the beneficiary gets the funds—no questions asked. After a divorce, it’s crucial to update these beneficiary designations to reflect your new wishes.
4. Adjust Guardianship Designations
If you have kids, their guardianship is likely top of mind. While custody might be settled in the divorce, your will should also reflect who you want to be your children's guardian if something happens to you. If your ex-spouse is still the best option, that’s fine, but if not, make sure your updated wishes are clearly laid out in your will.
5. Reassess Your Trusts
If you have a trust in place, especially one that benefits your ex-spouse, it’s time to reassess. You might need to amend or even dissolve certain trusts depending on your new situation. If your children are the primary beneficiaries, you might want to establish a new trust to ensure their financial future is secure, with a trustee you trust to manage the assets responsibly.
6. Update Healthcare Directives
Much like your power of attorney, your healthcare directive—often known as a living will—might need a post-divorce refresh. This document outlines your medical wishes if you’re unable to communicate them yourself and typically names a person to make those decisions for you. If your ex-spouse was that person, now’s the time to appoint someone new.
Divorce can be a fresh start in many ways, and your estate plan should reflect that new chapter in your life. While it might feel like just another task on a never-ending to-do list, these updates are crucial for ensuring that your assets are distributed according to your wishes. Take the time to revisit and revise your estate plan—it’s a small effort that can make a big difference for your peace of mind and your loved ones’ futures.
How to Get Started:
Start by taking inventory of your assets, considering your family's needs, and download our FREE workbook here.
Go to www.highsierralegal.com or our more affordable option www.yourestateplan.online
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