Divorce is often a draining and lengthy process. People have intense emotional reactions to the end of a marriage and often have a difficult time reaching appropriate solutions to concerns about property division matters and child custody arrangements simply because the situation at hand is so stressful.
After investing so much time and energy into separating one’s life from a spouse’s, it can be tempting to spend as little time as possible thinking about the ways in which one’s spouse was recently integrated into an individual’s life. However, divorce also has a major impact on pressing estate planning matters, so these issues need to be dealt with before someone can truly “move on.”
The legacy that an individual hopes to leave could be different after their marriage ends, and the support that they may require from others could also change. What updates do people frequently need to make to their estate plans during or shortly after a divorce?
1. Removing any reference to the former spouse
Spouses often assume authority in an emergency that leaves someone incapacitated and serve as the primary beneficiary of an estate when someone dies.
Recently divorced adults will need to revisit their testamentary and living documents to remove their spouse as a beneficiary and to ensure that they don’t have authority in the event of an emergency. They will also potentially need to revisit the paperwork for specific resources, including financial accounts with transfer-on-death designations and life insurance beneficiary paperwork.
2. Protecting new beneficiaries and children
Whether a divorced adult wants to leave resources to their closest friends or has children that they hope will inherit their property, they may need to adjust how they plan to pass that property on following a divorce.
Trusts are often useful for divorced individuals who share children with their former spouse, as trusts can keep a parent from having total control over the children’s inheritance. Naming someone with a history of responsible behavior who won’t be easily pressured by the former spouse will help preserve certain resources for the children’s future.
Most estate planning changes are not automatic after a divorce, which means that people have to take extra time to review their existing plans and update them to better protect themselves and their loved ones. Recognizing that a recent divorce is a compelling reason to review estate planning documents can benefit those who are ready to move on with their lives after dissolving a marriage.