If you are like many married couples, your estate plan reflects your marital status. Your may have created your plans together and you each made the other the primary beneficiary of your estate. If the marriage has now come to an end, it is important to revisit your estate plan following the divorce. The Hauppauge estate planning attorneys at the Law Offices of Kobrick & Moccia explain why updating your estate plan after a divorce is important.
Your Married Estate Plan
When you married, you probably made your spouse the beneficiary of many of your assets in your estate plan. In addition, you may hold title to assets jointly. Some married couples have estate plans that are even more intertwined, such as plans that include reciprocal Wills. You may also have appointed your spouse to important fiduciary and/or decision-making positions within your estate plan. All of that makes sense while you are married, particularly if you have children together; however, if you decide to end the marriage you should update your estate plan to reflect the change in your status as soon as possible after the divorce is final. Always consult with your estate planning attorney before actually making any changes to your estate plan that are the result of a divorce because the divorce laws in your state may require you to wait until the divorce is final before making any changes to beneficiary designation or changes in how property is titled.
What Happens If You Don’t Update Your Plan?
A good way to illustrate the importance of updating your estate plan following a divorce is to point out what may happen if you don’t update the plan. Once divorced, you probably don’t want your now ex-spouse to be the beneficiary of your life insurance policy (unless it is as the Trustee for your minor children) nor do you want him/her to inherit your estate assets – but that’s what will likely happen if you forget to update your plan. Worst still, imagine failing to update an advance directive that appoints your spouse as your Agent for making health care decisions for you in the event you incapacity prevents you from making them yourself? While the reasons to update your plan are clear, the problem is that people are often still dealing with the emotional fallout from a divorce and they don’t stop to think about the practical ramifications of the divorce.
What Do I Need to Update?
Of course, your estate plan should be as unique as you are. As such, your plan may not include all of the following documents and/or may include additional documents that need to be updated. The following, however, are some common estate planning documents that need to be reviewed and revised after a divorce is final:
- Last Will and Testament – along with removing your spouse as a beneficiary under the provisions of your Will, you may also need to remove him/her as the Executor of your estate and appoint someone new to the position.
- Trust Agreement – a trust is a very popular addition to the average estate plan. If your plan includes a trust, and you appointed your spouse to be the Trustee of the trust, you may need to amend the trust agreement to appoint a new Trustee.
- Life Insurance — your spouse is also likely the primary beneficiary of your life insurance policies. Before changing this, make sure that your divorce decree does not require you to continue to maintain life insurance that names your spouse as the beneficiary as is frequently the case when minor children are involved.
- Power of Attorney – at some point you may have executed a Power of Attorney naming your spouse as your Agent. You will want to terminate the POA as soon as possible.
- Advanced Directive – if you have an advance directive in place you probably named your spouse as your Agent, giving him/her the legal authority to make health care decisions for you if you are unable to make them at some point. Executing a new one naming someone else as your Agent should resolve this problem.
Contact the Hauppauge Estate Planning Attorneys
Please feel free to download our FREE estate planning worksheet. If you have additional questions or concerns regarding the need to update your estate plan following a divorce, or you want to get started with your update, contact the Hauppauge estate planning attorneys at the Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.