Terminating a marriage often brings emotional turmoil and stress, making it easy to overlook crucial aspects. Estate planning is a vital detail that demands attention, as divorce can substantially influence your estate plan. Failing to update your estate plan may lead to undesired outcomes, such as leaving assets to your former spouse rather than the intended recipient.
Update Your Will
During a divorce, revising your will is a pivotal component of estate planning. Updating your will to align with your current desires remains crucial. Contemplate the allocation of your assets, the appointment of guardians for your children, and the selection of an executor for your estate.
Beyond modifying your will, scrutinizing the beneficiaries of any accounts or policies with designated beneficiaries is imperative. In cases where your former spouse is a beneficiary, updating these designations is essential. This holds particular importance for assets that avoid probate, such as life insurance policies or retirement accounts.
Evaluate The Option Of Establishing Trusts
Forming trusts is another critical measure in estate planning following a divorce. Trusts offer an effective means of ensuring your assets are properly distributed. Trusts can be established to support your children, contribute to a charitable organization, or cater to a relative with special needs.
Trusts can also serve to shield your assets from your ex-spouse. For instance, you can create a trust that caters to your children's necessities without granting your former spouse control over the assets. Trusts may also avoid probate, which can be a potentially protracted and expensive procedure.
Update Your Power of Attorney
Post-divorce, reassessing and updating your power of attorney is vital. Your power of attorney refers to the individual you have appointed to make financial and legal decisions on your behalf when you are mentally unable. Updating this appointment is crucial if your ex-spouse was designated as your power of attorney.
When altering your power of attorney, consider the person you wish to designate as your agent. Choose someone you trust to act in your best interest and follow your wishes. Providing explicit instructions concerning your preferences and expectations is also of paramount importance.
Reviewing Your Estate Plan Regularly
Lastly, periodic evaluation of your estate plan is essential, especially following significant life events such as divorce. Your estate plan should mirror your current preferences and circumstances. Consistently reviewing your estate plan ensures the execution of your wishes as intended and helps avert disputes among family members.
Amending your estate plan can further mitigate conflicts among your loved ones. For example, if you have children from a prior marriage, updating your estate plan can guarantee their provision and preclude disputes between them and your current spouse.
For more info about probate law, contact a local professional.
Share20 March 2023
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