Did you know the US has one of the highest divorce rates in the world? That’s not exactly a fun statistic, but it’s one to be aware of. Most people aren’t thinking of divorce when they get married but the reality is it still happens a lot. The question is, how should you do estate planning after a divorce? Here are a few suggestions.
Tip 1: Reach Out to an Estate Planning Expert
The first thing we recommend is to contact an estate planning lawyer. They will be able to walk you through the entire process and help you understand what you can and cannot do. For example, they will probably give you some of the advice below, such as updating your will and power of attorney. But they will also be able to give you personalized advice that works for your specific situation but may not work for everyone.
Tip 2: Think About How Much to Leave To Your Ex
If you passed away tomorrow, how many of your assets do you want to leave to your ex? Most states don’t allow you to completely disinherit your spouse, even after a divorce. If you live in one of those states, know that a lot of clients choose to do the bare minimum required by our state.
Tip 3: Update Key Estate Documents
A lot goes into estate planning, but there are several key documents that are arguably the most critical. They’re the things that pretty much everyone needs.
Will – everyone should have a will. It doesn’t matter if you have a big family or you’re a bachelor. It doesn’t matter if you have a lot of assets or not. A will is a foundational document because it helps people understand what you want to happen when you pass on.
Let’s say that your will currently states you want your ex-spouse to take over your estate when you pass away. That’s probably not what you want now that you’re divorced, right? You should also have them removed as an executor of the will and appoint someone else that you have a better relationship with such as a sibling or close friend.
Another piece is your children. Do you have children who are minors? If you pass away, they’ll need someone to become a guardian for them. Your ex will most likely become their guardian, but you can still name someone as an alternate guardian in your will.
Power of Attorney – this is another important way that divorce affects state planning. You should update your power of attorney so it doesn’t include your ex. You probably would not want them to have access to all of your accounts if something happened to you, right? Now that you’re divorced, you should consider assigning your POA to someone else who you have a better relationship with.
Tip 4: Change Your Trust
If you’ve been working with an estate planning lawyer and already have a trust, we recommend amending it as soon as possible. Just like the will and power of attorney, you may not want to leave it as-is because it could mean leaving many assets to your ex.
Think of the trust as gifts to people when you pass on. Who do you want to receive those gifts? Are there children – either minor or adults – that you’d want to receive gifts? Maybe you were close with your brother in law and still want to leave him something even though your divorced now?
On the flip side, maybe your trust reflects gifts that you’d originally put in there just because your spouse asked you to. Now that you’re divorced you don’t want to give those gifts anymore so you can amend your trust.
Conclusion
Estate planning after divorce can lead to legal issues if you don’t stay within the law. That’s why we reiterate that your first step should be to contact an estate planning lawyer or give us a call at 714-663-8000 and we’ll help you amend your estate plan.