When couples go through a divorce, emotional and financial strain is often significant. Estate planning is probably the last thing on either person’s mind. Nevertheless, it is very important to revisit your estate plan after a divorce, as updating its provisions can save you a lot of unnecessary stress and complication in the future. Estate planning after a divorce is important if you want to ensure that your current wishes and plans are still reflected by its terms.
Important changes to be made following a divorce
There may be many specific terms that you will want to change following a divorce, but you may not know where to start. The first step, is to revoke your will or trust and create a new one. The changes you need to make to your will or trust involve your beneficiaries, your executor/trustee and a guardian for your minor children. These are the most important aspects of your estate plan that should be addressed after a divorce.
If you have a will already, it should be revoked and a new one drafted. If you do not have a will, it is time to make one. The same is true if you and your former spouse made a living trust together, which acts as a will, but does not need to go through the probate court.
Changing your beneficiaries
If you made your will or trust while you were married, most likely you left everything to your spouse. That is no longer the case, now. So, the first step is to identify new beneficiaries, as well as alternate beneficiaries, to inherit your estate. You may also want to reconsider any gifts to relatives of your former spouse (i.e., your in-laws).
Luckily, in most states, gifts to your former spouse are automatically revoked after a divorce. This may not be what you want, however, if you and your spouse parted amicably. Either way, you need to revisit your named beneficiaries to ensure that your current wishes are reflected.
Naming a new executor
Most people name their spouse as the executor of their estate. However, after a divorce, that should be changed. Just as you may no longer want your former spouse to inherit your property, you likely do not want your former spouse to be in charge of your estate. Similar to the revocation of gifts to former spouses, many states revoke the appointment of a former spouse as executor of a will, or trustee of a trust. If you named an alternate executor, that person will serve if possible. But, in case he or she is no longer available, it is important to change your executor now, and name a new alternate.
Choosing a guardian for your minor children
For couples with minor children, a crucial part of their estate plan is nominating a guardian for those children, in the event both parents pass away. Certainly, this is a difficult decision to make. The issue becomes much more difficult if the parents become divorced.
Most clients assume that, if they pass away while their children are still minors, the other parent will take care of them. While that is true in most cases, what if both parents pass away at the same time, or within a short time of one another. We cannot predict what may happen. In the event that your former spouse predeceases you, it is important to have a guardian nominated, in case something happens to you. If you and your former spouse can agree on who should be nominated, that is even better.
If you have questions regarding estate planning after a divorce, or any other estate planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.