An estate plan offers protection for dependent family members after someone dies. Certain documents can also protect individuals during emergencies or long-term incapacitation. Those who get married, have children and acquire valuable property often put together estate plans to protect the people that they love and provide guidance in the event of an emergency.
They will occasionally need to revisit their existing documents when their circumstances change. A divorce is one of the most common reasons that people need to update their estate planning documents. What revisions are typically necessary after someone files for divorce?
Removing a spouse as a beneficiary
Spouses are often the first person mentioned as a beneficiary in someone’s estate plan. They may inherit the marital home and most of someone’s financial resources. Adults will need to remove their former spouse as a beneficiary. They may also need to create additional documents if they want to leave assets for their children who are still minors. A trust can help ensure that a co-parent does not assume control over someone’s resources if they die while the children are still minors.
Replacing spouses who hold positions of authority
An individual’s spouse may play a major role in their estate plan. A spouse could be the trustee who should manage certain resources. They might also be the agent or attorney-in-fact named in someone’s power of attorney paperwork. Generally speaking, those who have divorced need to name someone else to take over those positions of authority. They want to entrust their care or resources to someone who will consistently act in their best interests.
Updating secondary documents
The actual estate plan someone drafts with a lawyer isn’t necessarily the only documentation that someone must update when they divorce. People sometimes have secondary documents that control specific assets. They may have taken title to their property in a way that gives their spouse certain rights. Financial accounts could have transfer-on-death designations attached that people need to update with their financial institutions. Life insurance is also an important consideration. People may need to change the beneficiary for their policy to remove their spouse.
Taking the right steps to update estate planning paperwork can make a major difference for someone preparing for a divorce and worried about their protection in the future.