Revising Your Estate Plan Post
Every year more than 740,000 couples get divorced — so if you are starting divorce proceedings you are not alone. This can be a very difficult time for everyone involved both emotionally and practically.
While you will have a lot to process, divorces also come with a lot of paperwork and important deadlines. This includes discussing the division of your assets and organizing child custody if you have children. However, a divorce can also affect important financial planning for the future, such as estate planning, as well.
Because of this, it is important to speak to your divorce lawyer about the plans you have in place for your estate. If you wish to update these during or after a divorce you should do this as soon as possible.
So how does a divorce affect your estate plan and what changes do you need to make? Read on to find out more.
Why is Estate Planning Important?
Anyone over the age of 18 in America can (and ideally should) have some sort of plan in place for their estate. This is a legal process that involves organizing what will happen to your assets if you die or become incapacitated.
Essentially, it allows you to outline who inherits your property and who you trust to make decisions on your behalf. Hiring an attorney can help you ensure that you have all aspects of your estate planning in place.
However, more than 60% of adults in America do not have any sort of estate plan in place. So what happens if they die and why is it important to create a plan for your property?
Well, there are several reasons why this is important. First and foremost, estate planning allows you to control what happens to your property after you die. This means that you can provide comfort and support for your loved ones.
Without an estate plan in place, your property will go to a default person or group of people in your life. This can include your spouse, children, and close relatives. If there is a dispute about your property then a court will make a final decision about the division of your assets.
What Should You Include in Your Estate Planning?
When organizing your estate, there are several things that you should consider. This includes:
- Making a will to bequeath your assets to family and friends
- Setting up any trusts or charitable donations that you want to make
- Naming an executor of your estate who will make major decisions about it after you die
- Outlining any requests you have for your funeral arrangements
- Giving instructions for child custody arrangements
- Choosing who you want to have the power of attorney if you are incapacitated
- Organizing your advance healthcare directives
Hiring a lawyer can help you ensure that your estate planning is well-organized and doesn’t leave room for dispute. This means you can enjoy peace of mind that your property will be taken care of when you die.
Where Do Spouses Come Into Estate Planning?
After someone dies without a will, often their closest living relative is the main beneficiary of their estate. This means that the majority of their property ends up going to this relative. If you become incapacitated, the majority of courts will appoint your closest living relative with power of attorney over your property and medical care.
If you are married then your closest living relative is your spouse or civil partner. This means that your property will automatically go to them if you die without a will. If you do not have a spouse then your next of kin can be:
- Your children (provided that they are over the age of 18)
- Your parents
- Your siblings
Even if you have been divorced, your ex-spouse can make a claim to some of your estates after your death if you do not have a will. Depending on which state you live in, the courts can decide how much your living relatives receive from your estate.
Why Should You Update Your Estate Planning When Getting a Divorce?
Once you decide to get divorced, your divorce attorney will recommend revising the plan for your estate. If you already have a will in place you may want to adjust how much your ex-spouse will receive after you die.
If you do not update your will after a divorce, then your current estate plans will remain in place even though your situation has changed. This may include giving your ex-partner the power to decide over things such as your medical care if you become incapacitated. For the majority of people, this is not the person they want in charge of important medical decisions.
If you do not already have a will then you should create one after a divorce to determine exactly what you want to happen to your estate. Without a will in place, your ex may be able to claim a portion of your assets after your death.
Do You Have to Update Your Estate Plan After a Divorce?
There is a stereotype that couples who divorce must absolutely loath each other but this isn’t always the case. While the end of a relationship is painful and can be complicated, some couples get on well with their exes. In fact, 6% of divorced couples end up remarrying their ex-partners later in life!
Even if you do not get back together with your ex, you may still wish to include them in your estate planning. So you do not legally have to update your estate plan at all after a divorce. This depends entirely on what you would like to happen to your property after your death.
If you do not have a lot of close family then your ex-spouse may still be the obvious candidate to inherit your estate. In that case, you may wish to leave your estate plan as it is. Or you may choose to update it slightly to include a small bequest for them.
So, if you are going to update your estate plan, when should you do this? You will be able to update some documents during your divorce, while others will have to wait until the divorce is finalized. Let’s take a closer look at both of these.
Which Documents Can You Update During a Divorce?
Once you decide that you are going to get a divorce, there are some estate planning documents that you can start updating immediately. Some of these relate to your estate, while others control what happens if you become incapacitated.
First and foremost, you should take a look at your advanced health care directive. This is part of your health insurance planning and lets you appoint someone to make decisions regarding your healthcare if you are unable to. For example, if you are in an accident and require surgery, they will have the power to sign off on this.
You can give anyone the power to make these decisions in your advanced healthcare directive, however, most people choose a close relative. You can also use this to outline any specific healthcare requests that you have. This includes ‘Do not resuscitate’ orders or requests about blood transfusions.
During a divorce, you can also update who has power of attorney over your estate. This means that your ex-spouse will not be able to make major decisions regarding the sale of your property after your death or if you become ill.
You can also recall any clauses in your will that relate to your spouse during your divorce. This depends a little on which state you live in. For example, in New Jersey, these clauses are automatically recalled during a divorce.
You should check with your lawyer about whether or not you need to update these clauses automatically. If you do die during divorce proceedings, your children and close relatives may be able to appeal your will. But you can save them a lot of time and money on legal expenses by updating your will as soon as possible.
What Needs Updating After a Divorce?
Once your divorce has been finalized there are several things that you can update.
During the divorce, the assets that you own may have changed somewhat. For example, property that you used to co-own may now belong to just you or your ex-spouse. Because of this, some clauses in your will may no longer be relevant or make sense.
In that case, it is a good idea to review your assets as they stand with an experienced lawyer. They will help you update your will to include any new assets and eliminate anything that isn’t relevant within your will.
You will also need to look at any trusts that you have created in your estate with a lawyer. Trusts allow you to bequeath specific assets and financial resources to people within your life. For example, you might create a trust for each of your children.
It can be difficult to dissolve trusts once you have created them. However, you can alter who is named on the trust. This is easier if you haven’t named someone specifically.
Any decent estate lawyer will advise you to create trusts for your “spouse”, “wife” or “husband” rather than naming your partner specifically. This means that if you are no longer married the trust is easier to dispute (as you don’t have a spouse anymore!) In that case, your assets will pass to the main beneficiary or heir of your estate.
If you do want to leave something to your ex-spouse then you can do this by creating a new trust or will that includes your “ex-spouse” as a beneficiary or by naming them specifically. This will avoid further confusion and prevent them from making a claim to the old trust. In fact, in Florida, a divorce judgment voids the former spouse’s claims under a will or trust that was in place prior to the divorce. Therefore, updating your documents, and including in both the will or trust and the divorce judgment that the former spouse is receiving assets from your estate is required in order for your ex to receive anything from your estate.
How Can a Divorce Lawyer Help?
There are a number of ways that you can approach a divorce. You can file the paperwork and reach an agreement yourselves or with the support of a mediator. Or you can hire an experienced lawyer.
This is a good idea if you have a lot of assets to divide or need to organize child custody and child support.
A lawyer will be able to represent your needs and protect any assets that you feel entitled to from your divorce. They will also represent you if you and your ex cannot reach an agreement about your divorce terms and your case has to go to family court. They also have the resources to take care of any paperwork and will reach all the necessary deadlines.
This practical support can be vital when you are going through an emotionally trying time. This allows you to focus on looking after your family and finding the fresh start that you need after a divorce.
Your lawyer will also talk you through your estate planning options. They can put you in touch with an estate planning lawyer if you want to update your will. So you can rest easy knowing that all of your affairs are in order.
Get Support Today
If you are getting divorced then there are obviously lots of things that you need to consider. Because of this, it is easy to get distracted by litigation proceedings.
However, it is extremely important to keep on top of your estate planning as well. This ensures that if anything does happen to you, your property will end up exactly where you want it.
Experienced family law and divorce lawyers will be able to support you with every aspect of your divorce, so you don’t have to manage on your own. To speak to a member of our family law team, get in touch today. We’re happy to help.