How Should an Estate Plan Be Updated After a Divorce?

A divorce can upend the lives of spouses and multiple other family members. The end of a marriage will require multiple types of financial changes as each spouse determines how to address their needs on a single income. In addition, it is essential to update estate planning documents to ensure that they reflect the new circumstances of different family members. An experienced attorney can help navigate the complexities of estate planning post-divorce.

The Importance of Updating Your Estate Plan

Following a divorce, many aspects of a person’s life change, and multiple family members will be affected. Updating an estate plan ensures that a person’s assets will be distributed according to their wishes. It can also ensure that healthcare and financial decisions will be managed by trusted people when necessary. Here are the key documents that may need to be updated after a divorce:

• Wills: A last will and testament specifies how assets will be distributed after a person’s death. Post-divorce, a person will likely want to change the beneficiaries in their will to ensure that their ex-spouse will no longer be entitled to inherit their assets. A will may also be updated to change the executor of the estate if an ex-spouse or a family member had previously been nominated for that role.
• Trusts: It is crucial to review and amend trusts as necessary following a divorce. This might involve changing the trustee or updating the beneficiaries. Ensuring that trusts are aligned with a person’s current financial and familial situation is vital, since it can maintain an estate’s integrity and help a person achieve their long-term goals.
• Powers of attorney: When a person has designated someone to make financial or healthcare decisions on their behalf if they are unable to do so, they may need to make adjustments to these documents after getting divorced. Any powers of attorney that name an ex-spouse or their family members as agents with decision-making authority may need to be revoked or modified to appoint other people who can serve in these important roles.
• Healthcare directives: Living wills and other medical directives may need to be updated to reflect a person’s current wishes. These documents may be modified to designate someone other than an ex-spouse who will have the authority to make healthcare decisions on a person’s behalf.

Unique Concerns for People With a High Net Worth

People with significant assets face additional complexities when updating their estate plans after a divorce. Here are some unique issues that may need to be considered:

• Tax implications: It is important to be aware of the potential tax consequences when modifying an estate plan. A skilled attorney can provide guidance on the best ways to minimize potential estate taxes or other taxes that may apply when transferring assets to beneficiaries.
• Business interests: A divorce may affect the ownership and management structure of a family business. It is important to ensure that an estate plan reflects any changes to business ownership and succession plans.
• Asset protection: Updates made to an estate plan after a divorce can help protect assets from future claims or liabilities. This can be especially important for those with substantial wealth.

Contact Our DuPage County, IL Estate Planning Lawyer

After getting divorced, there are a variety of crucial updates that may need to be made to an estate plan. At the Gierach Law Firm, we can provide guidance on the best ways to ensure that your estate plan reflects your new circumstances while providing for the needs of you and your family. For comprehensive legal support, contact our Naperville, IL estate planning attorney at 630-228-9413 and set up a consultation.