How You Should Update Your Estate Plan After Getting Divorced

Divorce is a significant life event that can have a major impact on your estate plan. It is crucial to review and update your estate planning documents after getting divorced, especially if you are someone with a high income or extensive assets. By addressing the following issues, you can make sure you will be prepared to address the concerns that you and your family may encounter in the future:

Updating Beneficiary Designations

Following a divorce, it is important to revisit the beneficiary designations specified in various financial accounts and insurance policies. You may need to remove your ex-spouse as the primary beneficiary and replace them with new beneficiaries such as children, siblings, or other trusted individuals. Check all of the following:

• Retirement accounts: Review and update the designated beneficiaries for any Individual Retirement Accounts (IRAs), 401(k)s, or other retirement plans you may hold.
• Life insurance policies: Assess and amend the named beneficiaries who will receive benefits in the event of your death. You may also need to consider whether existing coverage levels are appropriate based on changes in dependents or financial circumstances.
• Pension plans: If you work in a pension-eligible position, you may need to evaluate and modify pension plan beneficiary designations, while also ensuring that a qualified domestic relations order is used to divide pension benefits with your ex-spouse according to the terms of your divorce decree.

Revoking Powers of Attorney

Dissolving a marriage generally necessitates updating your powers of attorney. If you had a power of attorney in place that allowed your spouse to make decisions on your behalf should you become incapacitated or unable to handle financial and healthcare matters on your own, you will most likely want to update these agreements. Ensure that the following steps are taken:

• Financial power of attorney: By revoking an existing power of attorney, you can make sure your ex-spouse will not be able to gain control of your finances if you become incapacitated. You can create a new power of attorney agreement naming a person you trust who will be able to address these issues on your behalf if necessary.
• Healthcare power of attorney: If your former spouse had been named as a healthcare agent, you will want to consider appointing another individual who you trust to make medical decisions for you if you ever become unable to address these matters on your own.

Updating Will and Trust Documents

The divorce process can significantly impact provisions within wills and trusts. You will want to take these important steps following your divorce:

1. Last will and testament: Review your existing will, revoke any provisions related to your ex-spouse’s inheritance rights, and consider new plans for distributing your assets among beneficiaries such as children or other family members.
2. Living trusts: Examine any revocable living trusts established during your marriage. You may need to update the terms of trusts to specify how assets will be distributed to beneficiaries or to name a new successor trustee.

Contact Our DuPage County Estate Planning Attorney

Updating your estate plan following a divorce is essential, especially if you have extensive assets or a high income. The experienced Naperville estate planning lawyer at [[title]] can guide you through this process and ensure that your wishes are properly reflected in legally sound estate planning documents. Contact us today at 630-756-1160 to learn more about how we can help ensure that your estate plan reflects your wishes. You deserve peace of mind knowing that your estate plan is up-to-date and aligned with the changes in your life.

Sources:

https://www.investopedia.com/rewriting-your-will-after-divorce-5193318

https://www.forbes.com/sites/christinefletcher/2019/01/08/9-things-you-need-to-know-about-estate-planning-after-divorce/

https://www.thebalancemoney.com/estate-planning-documents-to-update-for-divorce-3993981