Unfortunately, divorce is now more common now than it was years ago. In fact, more than half of all first marriages, and approximately 60 percent of second marriages end in divorce. While divorce clearly affects the spouses and children emotionally, it also has a significant financial impact. If you are currently in the process of a divorce, or recently finalized one, be sure to consult with your estate planning attorney to ascertain what estate planning changes may need to be made. While each situation is unique, the following changes, as well as others, may need to be made:
- Replace your ex-spouse as the beneficiary of retirement plans, pension plans or life insurance policies. Do not count on state laws to automatically remove your ex-spouse as a possible beneficiary.
- Removal of your ex-spouse as a beneficiary in your Last Will and Testament.
- Appointment of a guardian in your Will for your minor children.
- Creation of a trust and appointment of a trustee. Unless you want your ex-spouse to control funds left for your minor children, you may wish to create a trust for all assets left to them and choose a capable and trustworthy trustee to oversee the administration of the trust.
- Execute a new living will (often called an advanced directive or healthcare directive). You likely appointed your ex-spouse to make decisions on your behalf in the event of your incapacity. Unless you still want him or her to make these decisions, you will need to execute a new document.
- Revoke any power of attorney documents you executed making your ex-spouse your agent.