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5 Steps for Estate Planning in a Divorce

Divorce can have significant impacts on your estate plan, and it is important to update your plan to reflect any changes in your personal situation. It is recommended to consult with a lawyer for specific legal advice on the changes to consider making to your estate plan during and after the divorce process.

While it is not typically the intention of individuals to divorce their spouse when entering a marriage, divorce is a common occurrence. It is important to update your estate plan in the event of a divorce, as your spouse may still have certain legal powers until the divorce is finalized. It is recommended to consult with a lawyer for specific legal advice, but here are some changes to consider making to your estate plan during and after the divorce process:

  1. Update Your Power of Attorney

    There are different kinds of POAs. Healthcare POAs enable agents to make medical decisions if you are incapacitated, while General POAs vest a broader array of powers in the designated agent. If the divorce is particularly contentious, would you want your estranged spouse to make life and death medical decisions for you in the ICU? If not, you should delegate your healthcare POA to someone else you trust.

    If you have a Durable General POA with your spouse as a listed agent, you probably want to change this as soon as possible. General POAs normally allow the listed agent to access all of your accounts and assets – even ones only listed in your name! To make sure that your revocation of the POA is legal, you should contact an attorney to assist you in this process.

  2. Update Your Will

    Depending on your state, you may or may not be allowed to create a new will during divorce proceedings. If your spouse is the executor (or personal representative) of the estate, it’s a good idea to select someone else you trust for this important role. Most states have rules that restrict your ability to disinherit your spouse, but you might (consult an attorney) be able to reduce the amount designated for your spouse in line with your state’s elective share laws.

    If you have minor children, your will may contain provisions dictating their care if you die. The chances you can remove your spouse as guardian entirely are minimal, but you likely can add an additional alternate guardian.

  3. Amend Your Trust

    If you can amend your revocable trust, you should do so as soon as possible. One reason is that you may want to decrease your spouse’s inheritance (in line with your state laws) or remove gifts designated to the spouse’s family members. If possible, remove your spouse as a trustee.

    If you have a trust set up for your minor or disabled children, you may not your spouse to access your assets on behalf of your children if you die. If you don’t trust your spouse with managing the trust in the best interests of your children, name someone else as a trustee (or at least as a co-trustee).

  4. Ensure Your Estate Plan is Compatible with Any Pre or Post Nuptial Agreements

    If you have a pre-nup (or post-nup), your attorney should review this with you to ensure that your estate-planning changes are compatible with the agreement.

  5. After the Divorce is Finalized

    If your state allows you to change the listed beneficiary from certain financial assets (such as a 401(k) or life insurance) during the divorce, you should consider this. If not, then you should review all of your assets and change the beneficiaries after the divorce in a manner consistent with your wishes. If the proceedings restricted you from implementing a certain change in your plans, now is the time to make those changes. The last thing you want is an estranged ex-spouse (or their family) to reappear upon your death and demand certain assets, only to find out that they are entitled to them because you never changed your estate planning documents!