When caught in the maelstrom of divorce, it’s easy to let your estate planning go by the wayside. But as you embark on this new chapter of life, it’s crucial that you rewrite your estate. Otherwise, when you die, your assets could go to people no longer of your choosing – including your ex.
Following are key steps to take to update your estate plan to reflect your current wishes.
1. Rewrite Your Will (tear up the old one)
Name new beneficiaries
If you made a will while you were married, you probably left everything to your spouse. Now that you’re divorced, that’s probably the last thing you want to happen. Tear up, burn or shred your old will and start fresh. Rewrite your will and name new beneficiaries to inherit your assets.
In most states, California included, if you get divorced after making a will, any assets designated for your spouse are automatically revoked. But it’s best not to rely on state law, because laws can change.
Name an executor
If, as in the above, you named your ex-spouse to be the executor of your estate, rewrite your will and designate a new executor and an alternate executor.
Name a guardian for your minor children
If you have minor children, be sure to name a guardian who will raise your children in the event that you and the other parent aren’t available. A court will appoint a guardian to care for your children only if both parents are deceased or unfit. If your ex-spouse survives you, he or she will become the children’s sole guardian. If you believe the other parent is irresponsible, abusive or otherwise unfit to serve as guardian, you can voice your concerns in a letter and attach it to your will for the court to consider.
2. Update beneficiary designations
Some of your most valuable assets may not be covered by your will. Many assets are passed outside of the will to beneficiaries named on paperwork provided by a bank or insurance company. So be sure to designate new beneficiaries to inherit your life insurance policies, retirement accounts (IRAs and 401(k)s), transfer-on-death brokerage accounts, and other assets not included in your will.
To name a new person to inherit these assets, request new documents from your bank, employer, and brokerage company, and submit them as soon as possible.
3. Designate New Powers of Attorney
Powers of attorney give someone authority to act on your behalf if it’s ever necessary, e.g., you become incapacitated. You should have powers of attorney for financial matters and a Health Care Directive for medical decisions. If you already have these your ex authority to make decisions on your behalf, revoke them immediately and rewrite! You most likely do not want your ex making any financial or health decisions when you are in crisis.
If you have questions about your estate planning options, feel free to contact us for an upcoming free seminar.