Among the important but sometimes overlooked impacts of divorce are the changes that may need to be made in your estate planning. If you currently have a will, a trust or other planning documents in place, there are several steps you should take to review and revise them in order to account for your new circumstances after the divorce.
Generally, a divorce does not automatically change your will or your beneficiaries. But in Michigan, there is an exception: a divorce automatically voids any bequest to your former spouse. The will may still be considered valid, but the property bequeathed to the former spouse goes instead to any contingent beneficiaries, or else it fails. Likewise, a divorce revokes any nomination of your former spouse to serve as your executor, as a trustee or in any other fiduciary role.
While this means that your spouse will not take a share of your estate or act as your personal representative, you should still take steps to make alternative plans.
First, draft a new will and revoke the existing one, which means burning, tearing or otherwise destroying the document. You may want to rethink how you want your estate distributed, especially in light of any division of property that occurred in the divorce. You also need to name a new executor, who cannot be a member of your former spouse’s family. In addition, if you do not wish your former spouse to be the guardian of your children in event of your death, you will have to nominate someone else to serve in that role.
Second, you may have designated your spouse as a co-owner or beneficiary your bank and financial accounts, including retirement accounts and pensions. After a divorce, you need to review those account designations and decide on changes. The same is true for life insurance policies. For certain retirement plans, there might be tax consequences for early withdrawals, so you may wish to seek professional assistance.
Third, you may have executed documents that allow your spouse to manage your finances and/or medical care in the event you become unable to do so yourself. You may wish to revoke any healthcare directive or power of attorney and to create new documents appointing other individuals you trust to take over these roles.
If you are considering filing for divorce, an experienced divorce and inheritance attorney can provide guidance throughout the process and assist you in making desired changes to your estate planning instruments.
At Dawson Family Law PLLC in Sterling Heights, we are well-versed in helping Michigan residents in all aspects of divorce. To set up a free initial consultation, please call 833-671-4445 or contact us online.
