A divorce is usually an emotionally and financially turbulent time. Understandably, estate planning may be your last priority when you’re facing the breakup of your marriage. Once your divorce is final, however, it’s important to turn your attention to your estate documents.
Similarly, people who have been divorced for years but have neglected to update their estate plans should take a close look at all their estate documents, including things like employer-provided life insurance plan beneficiary forms and 401(k) plan beneficiary designations. If you don’t update these documents after your divorce, your assets might not be distributed in the way you would have wished.
How Divorce Impacts Your Will
When most people think “estate plan”, a will is the first thing that comes to mind. Under Minnesota law, ex-spouses can’t inherit under a former spouse’s will, even if the former spouse neglects to remove them. Although the law provides this sort of “safety net” when it comes to your will, it’s still a good idea to draft an entirely new will after your divorce is final. Otherwise, the property left to your ex-spouse may not be distributed as you wish.
If you have a trust, your divorce will also effectively remove your ex-spouse as a beneficiary as soon as the judge signs your final divorce decree. As with a will, however, it’s still best to amend your trust documents with the help of an experienced estate planning attorney.
How Divorce Impacts Your Beneficiary Designations
After you update your will, it’s time to take a look at all your assets that fall outside probate. Non-probate assets include items that specifically designate a beneficiary. Many people fill out these beneficiary designation forms when they start a new job or purchase life insurance and then never think about them again. If your former spouse is listed as your primary beneficiary on your 401(k) or life insurance policy, it’s important to update your beneficiary designations to reflect your current wishes. Examples of assets with designated beneficiaries include:
•· Life insurance
•· Irrevocable trusts
•· Transfer on death accounts
•· Payable on death accounts
How Divorce Impacts Your Health Care Directives and Powers of Attorney
Health care directives and powers of attorney are useful estate planning tools that allow you to appoint a trusted individual to oversee your finances and make health care decisions on your behalf in the event you become unable to do so. Most married couples appoint each other to serve in these roles. After a divorce, it makes sense that you wouldn’t want your ex-spouse to have this kind of authority over your money and health care choices. It’s important to update these documents once your divorce is final.
St. Paul Estate Planning Lawyers
Divorce is rarely an easy process. At Jeffrey P. Scott & Associates, LLC, we understand the emotional uncertainty that often accompanies divorce. We will work with you to make updating your estate documents a smooth, cost-effective transition. Call us today our office.
This website has been prepared by Jeffrey P. Scott & Associates, LLC for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.