Divorce is a significant life change that requires you to look at almost every aspect of your life. One thing that some people don’t realize they should check is their estate plan.
While it might be tempting to change your entire estate plan as soon as you know you’re divorcing, you should wait. The primary reason is that you don’t know what assets you’ll walk away with during the property division. At a minimum, review these areas of the estate plan:
1: Powers of attorney for finances and health care
More than likely, your spouse was the person who would make decisions about your healthcare and finances when you were married. But, is this still the person whom you want to make those decisions? If not, getting the powers of attorney updated is a priority.
2: Beneficiary designations for your will and trusts
Once the divorce is final, your ex won’t have any rights to your assets unless you have your ex in your estate plan. Establishing new beneficiaries in an updated estate plan is crucial at this point.
3: Payable on death designation on financial accounts
Financial accounts, such as checking and savings, are distributed according to the payable-on-death designation you set up when you opened the account. You should check those to ensure they’ll go to the person you want to have them now. While you’re at it, check on retirement and investment accounts.
Once the divorce is finalized, you can take the time to update your entire estate plan, including the assets you need to include in it. Working with someone familiar with estate planning post-divorce may help determine how to proceed.