Recently Divorced? Make Sure You Tie Up All The Loose Ends, 10-29-2010
Written by The American Academy of Estate Planning Attorneys,
Compliments of Morris Hall
As anyone who’s been through it can confirm, divorce can be an emotionally draining, even devastating, experience. And it’s an experience that more and more Americans are sharing. Currently, almost half of all first marriages end in divorce.
Once your divorce is finalized, you might think that all your legal ties to your former spouse are completely cut, and there’s nothing else to do. This could not be further from the truth, especially if the two of you created an estate plan during your marriage. Even though your debt and property have been divided up as part of the divorce process, and custody of any minor children has been determined, you still have some important decisions to make. The good news is that tying up the loose ends is a much simpler and more straightforward process.
You’ll want to start by pulling out any estate planning documents you and your spouse signed during your marriage. You will need to have a new Will and Revocable Trust prepared, even if you want the same dispositions. Do you have a Financial Power of Attorney or Healthcare Power of Attorney? If so, who did you name as your agent? It was likely your spouse, and in many states, he or she keeps that position despite your divorce. In light of your new circumstances, you may want to reconsider allowing your ex-spouse to make important decisions concerning your health and finances.
You’ll also want to review the beneficiary designations on your life insurance policies and your retirement accounts. You likely designated your former spouse as beneficiary. Divorce may automatically revoke his or her rights as beneficiary for some things and not others. You’ll want to select new beneficiaries to be certain.
There’s no requirement that you remove your former spouse from every single estate planning role. For example, if you have children and you’ve appointed your ex- to serve as Trustee for the children’s trust, you may very well want him or her to continue in that role.
The important thing is that you know exactly which legal ties you and your spouse still share, and that you keep only the ones you want. A qualified estate planning attorney from Morris Hall can help you review and revise your estate planning documents, making those all-important adjustments that will lay the foundation for your future.