Going through a divorce can be painful, overwhelming, and stressful. It’s the end of one chapter and the start of another in your life. Although it might be the right decision, you’re forced to confront various issues. For example, you and your ex must agree to the terms of the divorce, such as child support, alimony, and property division.
However, there’s another often-overlooked aspect of divorce – estate planning. Below are the elements of estate planning you should consider to prevent your ex-spouse from acquiring your assets or retaining control over your affairs if something happens to you.
Update Your Beneficiaries
Assets, such as retirement plans, life insurance policies, and bank accounts allow you to name a beneficiary. That person will receive the funds contained in the account when you pass away, regardless of what’s in your will or trust. A divorce does not negate a beneficiary designation either, so be sure to update each one after the proceedings if you wish to prevent your ex-spouse from inheriting from you.
Consider a Trust to Manage Your Children’s Assets
If you and your ex share young kids, the court could give your ex the responsibility of managing the funds you decide to leave to your children. Unfortunately, that allows your ex to access your accounts. They could also choose to use your money and assets for their own benefit.
Ensuring your minor son or daughter receives their inheritance may require you to establish a trust and appoint a natural trustee. The trustee you choose should understand their role in your child’s life and how to manage your assets. If you want the funds from your bank account to go towards your kid’s education, medical care, or another necessity, indicate that in your estate plan.
Don’t Forget About Your Will
Besides changing the beneficiary of specific assets, you also have to update your will. It’s possible that your ex-spouse could still inherit what you own at the time of your death if they are listed in the document. When you are legally able, be sure to replace your ex with your children, parents, or anyone else whom you want to receive your inheritance.
You should also consider how to draft your will if you plan to remarry, as your new spouse could receive all your property and leave your children from a prior relationship with nothing. Talk to your attorney if this is a concern for you. A trust may also be a solution in this situation.
Positions of Authority
As soon as you file (or possibly before), talk to your attorney about removing your spouse from positions of authority in your estate plan. Chances are, you do not want your ex to serve as Power of Attorney or Healthcare Agent who can make life or death decisions for you in an emergency. Your attorney will help you remove your spouse and appoint someone else in his or her place.
There’s a lot to think about during and after a divorce, and estate planning is one task that should be “top of mind” for your protection. If you have questions or need help completing any of the steps in this article, please reach out to our office for assistance. Simply call (718) 875-2191 and mention this blog post or schedule online here.