When a marriage doesn’t last until “death do us part,” the spouse’s estate plans will likely need updating. Property division, alimony and child support orders during a divorce can leave each spouse with a substantially different financial position than existed during the marriage. A divorcing person may also have a change of heart about who should be the beneficiaries of a will or trust and who should be chosen to act as an executor or trustee.
Whether you are in the process of or have already concluded a divorce, it is a good idea to review your estate plan and determine if the following need to be updated:
- Last will and testament —If your ex-spouse is the primary beneficiary and the executor of your will, you may wish to revisit those selections. A trusted relative or friend may be named to serve as executor and you may designate your children, other loved ones or charitable organizations as your beneficiaries.
- Life insurance plan — A divorce settlement may require you to name your spouse as a life insurance beneficiary, or the agreement may have one of you waive your interest in the other’s life insurance. If life insurance arrangements are not included in the divorce order, you may decide to replace your spouse as beneficiary.
- Retirement plan — IRA, pension plan or other retirement account earnings accrued during a marriage are considered marital property, and so may be divided between spouses during the divorce. After the divorce, you may wish to change the beneficiary.
- Powers of attorney — Depending on the terms of your power of attorney, your designated representative may be able to make decisions about your medical care, finances, business affairs and other matters. If your spouse is your chosen proxy but you do not trust him or her to act in your best interest, it is time to create a new power of attorney document.
- Trusts — If you have created a revocable trust that includes your spouse as a beneficiary, you have the power to revise it or to revoke and replace it to redirect the disposition of the trust property.
- Guardianship — Though your surviving ex-spouse will likely gain custody of your minor children if you die, you can name another preferred guardian in the event that your ex cannot take over parenting duties. This can also address the possibility of both of you dying at the same time.
If you fail to update your estate plan after a divorce, you run the risk that your assets will be distributed against your wishes and that legal battles may spring up between your loved ones. Take proactive measures by speaking with a Michigan attorney knowledgeable in the areas of estate planning and divorce. Call the Sterling Heights office of Dawson Family Law PLLC at 833-671-4445 or contact me online to schedule your free initial consultation.