All You Need to Know about Estate Planning after Divorce
When you experience divorce, everything becomes a juggling task.
To some degree, you’re a single parent, co-parent and an ex-spouse. (Those who choose to get married after divorce should beware of this also.) Add to that a late-in-life career change, continuing education, and/or retirement planning. And there’s the job of advisor and confidant to those who are younger and have no concept of what it is to have lived through a divorce.
What you do in the first few years after divorce can have an impact on your financial future. There are several financial tasks to consider once you are out of the divorce process. The physical and financial assets you have right now (or will have in the future) will now be your responsibility.
Here are some “non-negotiables” , a few important items you need to consider in your estate planning after a divorce.
Make Sure Your Children and Other Beneficiaries Are Considered
To many, this seems like a no-brainer. But to others, it is a huge oversight to overlook. Make sure you formally write out how you want your assets to be distributed to your kids, friends, parents and/or others.
If you want to allocate your assets differently, you can specify this in your will. Again, this is something you need to be actively involved in. Even after you have gone through the divorce process, changes can happen, and it is always a good idea to update the assets and beneficiaries you want to include.
Remove Your Ex-Spouse from Any Beneficiary Designation
This is especially important if you have a current beneficiary designation, such as on your IRA or life insurance policy. Make sure to take the time to formally remove your ex and have it recorded at the financial institution.
Your ex could come after your assets and/or with a claim for a percentage of your assets. It is always a good idea, in the event of a death, to have your assets transferred to your beneficiaries of choice.
Make Sure All of Your Legal Documents Are Current
New laws and changes in marital status can impact your legal documents. Review your estate planning and make sure all of your legal documents are up-to-date and reflect your current status. This will make it easier for your survivors to go through the process of probate and make sure your assets are properly transferred to those you have designated.
Consider the Need to Update Your Will
It is a good idea to update your will to include the changes that have taken place in your life. This will help ensure the wishes you have stated are carried out.
For example, if you have remarried and have minor children from your current marriage and your children from your previous marriage are already 18 years of age or older, you will want to make sure your new spouse and your current children are the beneficiaries of your assets.
If you haven’t designated specific assets for your current spouse, they will be entitled to your assets according to your state’s laws.
Change Your Life Insurance Policy
Another area to consider is life insurance. If you have a term life insurance policy on your spouse’s life, it will end at the death of your spouse, unless you convert that policy to a permanent or whole policy. If you have a life insurance policy that is important to you, it is a good idea to update your beneficiaries.
In addition, if you have a disability policy that includes your spouse, it may need to be reviewed. If you’re divorced, your ex-spouse will not receive these funds if you were to pass away.
Finally, if you have dependent children, you may be able to make changes to ensure that your ex does not have access to the funds.
Revoke Joint Estate Plan
Revoking a joint estate plan is not something that you want to do casually. It should be done with careful consideration to avoid any unintended consequences. For example, if you cancel a joint savings account that you share with your spouse, they could contest those funds in your will. The same can happen with a joint tenancy in a home. But the difference is that sharing a joint account or property with your spouse, as opposed to someone else, can have adverse effects.
Your spouse will have an interest in that asset and could make a claim to that asset in your will.
If you decide to revoke your joint estate plan, you must do so in writing and both parties must sign the revocation together.
As you can see, there are many areas that need to be considered and addressed as you move forward with your life after divorce. Through this article, we hope you have gained insight into several important estate planning steps to take. Estate planning can be confusing. It is not something to do on your own. With this in mind, it is important that you have the right information, guidance and advice to make the right decisions. It is always best to seek professional legal counsel for advice on your specific situation.
It is never too late to make changes to your estate plan and it could be best to get these taken care of sooner than later. Estate Planning Lawyers Colorado provides the best estate planning attorney in Colorado that can help you with every aspect of estate planning after divorce. Let us get you back on track with your life as we guide you with your estate planning needs. Book a call with us today to get started!