Death & Divorce: Review and Revise Your Estate Plan After Divorce

After you successfully dissolve your marriage and divide the community estate, it is time to consider your estate plan as a single person. If you already have a plan, it is imperative that you review the terms of your agreement and make changes that reflect your current station in life. If you do not have a plan, now is a great time to create one.

First, you should provide your estate planning team with a copy of your divorce agreement. This will identify the assets and obligations awarded to you in the matter which can be incorporated into your estate plan.

Next, you should consider revising various provisions including the person named as the executor of your estate, guardian of your children and power of attorney as it relates to health care and financial decisions. If your spouse was previously named as the executor then you will want to make another suitable choice after your marriage terminates. In addition, you may want to identify a guardian to care for your children should you and the other parent die before they emancipate. Finally, you may want to create a trust for the benefit of your children to ensure their financial security. Other accounts that generally do not transfer through probate should also be reviewed including retirement accounts and bank accounts. Typically, retirement accounts such as 401k plans, Individual Retirement Accounts and Life Insurance plans, as well as regular bank accounts pass to the co-owner or named beneficiary upon death.

However, if no beneficiary is named or the named person is deceased with no contingent beneficiary, then the assets will go to probate. It is common for spouses to be named as co-owners or beneficiaries during the marriage so it is incumbent to review these assets after your divorce and make any necessary changes. You do not want to go through the divorce process only to have assets awarded to you pass to your former spouse or worse be tied up in litigation because you forgot to update your accounts.

Dealing with a divorce can be overwhelming and emotional. Taking proper actions regarding your estate plan before and after divorce can provide financial protection for yourself and heirs to eliminate unnecessary complications.