A finalized divorce may give you the closure you need to move on, but it might not be quite the clean slate many look for. Many spouses create many legal arrangements while together, which can complicate their circumstances, even after divorce.
You may have a will, power of attorney directives, trusts, retirement accounts, or life insurance that names your former spouse as a beneficiary. If these documents are still legally binding, acting to revise your estate planning documents should be a priority after your dissolution is finalized.
After a divorce, some states may consider former spouses “non-existent” for the purposes of a will, which means assets will go to whoever is next in line when the individual dies. However, it is risky to rely on this option, as it is not applicable in every state. Instead, a safe course of action is for an individual to revoke their old will and create a new one with updated information.
Powers of attorney (POA) documents will often go along with an individual’s will. This appoints someone to make decisions on the individual’s behalf if they are no longer able to. For instance, financial POAs can make decisions over legal and financial affairs, while healthcare POAs can make medical decisions if the individual is unable to do so. If an individual originally named their former spouse or in-laws in any of these documents, they should retain a skilled lawyer to update the documents as soon as possible.
Parties who set up trusts for themselves or their children should also revise those documents. Many couples name each other as trustees—the party who will oversee the account in the event of one’s passing. If the trust is not updated, a former spouse could end up with control over an individual’s assets.
Retirement accounts and life insurance policies are not handed down through a will. Instead, individuals name direct beneficiaries when establishing the accounts. Many individuals name their spouse as a beneficiary when creating a retirement account or while opening a life insurance policy. This means those parties will receive the payouts upon the individual’s passing if it is not updated after a divorce.
Divorce is already emotionally and financially draining, but if you fail to properly update your estate planning documents and policies, your finances might continue to suffer in the future. Speak with an experienced attorney at our office today to discuss your circumstances and help ensure your affairs are in order. Our team is standing by and is ready to assist you.