Divorce often means you need to change many things in your life, including your estate plan. It is important to make sure your estate plan matches what you want now so your assets are safe and your loved ones are taken care of. What steps should you take?
Review and revise your will
Your will is a key part of your estate plan, and it probably mentions your ex-spouse. After a divorce, you should revise your will so your assets go where you want them to. This might mean taking your ex-spouse out as a beneficiary.
Update your beneficiaries
Many assets like life insurance policies, retirement accounts and payable-on-death accounts go straight to the people you named, no matter what your will says. In addition, for certain 401(k)s and qualified retirement plans, federal law prevents you from automatically removing your ex-spouse as a beneficiary unless a Qualified Domestic Relations Order (QDRO) is obtained. It is important to speak with an attorney and discuss what type of accounts you have and determine the appropriate way to update your beneficiaries.
Consider who will make decisions on your behalf
If you named your ex-spouse as the person who can make decisions for you under a power of attorney or healthcare directive, you might want to pick someone else. Choose a trusted friend or family member who will do what’s best for you.
Consider creating a trust
If you have young children, making a trust can be a good way to handle their inheritance. If you pass away before your kids are adults, the court might choose your ex to manage their inheritance until they grow up. A trust lets you choose someone to manage the money until your kids reach a certain age or milestone.
Discuss your needs with an attorney
Figuring out estate planning after a divorce can be confusing. Talking to a lawyer who knows about estate planning can help you understand your choices and make good decisions that fit your goals. They can also help make sure your updated plan follows any rules set during your divorce.
You can build a plan that reflects the next chapter of your life
By updating your estate plan after a divorce, you can feel calm knowing your assets are safe and your loved ones are cared for the way you want. Making these changes is important for moving on and creating a safe future.