Going through a divorce can be a tumultuous time in anyone’s life, emotionally and financially. But what many might not immediately consider is the implications that this significant life change has on their estate plan. Whether you’re recently divorced, in the process, or even if you’re currently married and want to prepare for all eventualities, understanding how such an event alters your existing estate plan is crucial.
At Cornerstone Legal, we understand that the stability of having a solid foundation for your future and that of your loved ones can offer profound confidence during uncertain times. With a comprehensive list of services, including Estate Planning, Business Planning, Trust Administration, and Probate Administration, our goal is to guide you through these complex changes with ease and expertise.
The Interplay Between Divorce and Estate Plans
An estate plan often includes documents like a will, trust, durable power of attorney, and healthcare power of attorney, all of which may be affected by divorce proceedings.
Wills and Trusts
Typically, spouses are significant beneficiaries in wills and trusts. However, in most states, a divorce automatically revokes any dispositions or appointments of property to a former spouse. Suppose you fail to update your estate plan after a divorce though. In that case, it may result in your assets being distributed in a way that no longer reflects your wishes or to unintended beneficiaries remaining on your plan.
Related: How a Living Trust Will Secure Your Estate
Power of Attorney and Healthcare Directives
Just as important in estate plans are the Power of Attorney (POA) designations and healthcare directives. If your spouse was appointed as your agent, a divorce could nullify their role. You will need to appoint someone else to make financial or healthcare decisions on your behalf if you become incapacitated.
Related: What is a Power of Attorney?
Beneficiary Designations
It’s not just your will or trust—retirement accounts, life insurance policies, and even some bank accounts have named beneficiaries that must be reviewed. Forgetting to update these may lead to your former spouse receiving these benefits upon your passing.
Steps to Update Your Estate Plan Post-Divorce
- Revoke and Rewrite Your Will – Your prior will should be revoked and a new one drafted that reflects your current intentions.
- Establish a New Trust – If you had a revocable living trust, you might need to retitle assets and determine new beneficiaries.
- Update Powers of Attorney – Nominate trusted individuals to handle your financial and healthcare matters if you become incapacitated.
- Change Your Beneficiaries – Immediately review and adjust beneficiaries on all retirement accounts, life insurance policies, and bank accounts.
- Appoint New Guardians – If required, choose a guardian to care for your minor or dependent children.
- Secure Your Digital Legacy – Update any digital estate planning considerations, including access to your digital assets and online accounts.
Cornerstone Legal is ready to assist as you build a new foundation post-divorce. With years of experience in the areas of Estate Planning, Trust Administration, and more, we can create or revise estate plans that protect you during life’s transitions.
While divorce can be unsettling, estate planning doesn’t have to be. By taking control of your estate plan during or after a divorce, you maintain control over your assets and ensure your wishes are honored. For personal guidance and support tailored to your unique situation, we can help ensure that your estate planning needs are met with careful consideration and legal expertise.
For more information about how we can assist you, or if you have further questions regarding your estate plan and divorce, please reach out to us at (517) 708-2222 or explore our resources, plans, and FAQs at Cornerstone Legal.
This blog post is for informational purposes only and does not constitute legal advice. Be sure to consult with a licensed attorney for advice on your own estate planning needs.
Call (517) 708-2222 or email me at Katrina@CornerstoneLegalPLLC.com
