A divorce decree settles the financial and legal matters between you and your ex-spouse. However, it does not change the estate plans you had made during the marriage, and it might not be in your best interests. You had probably included your former spouse among the beneficiaries or even as the administrator. If you do not amend your estate planning documents, your estate could land in the wrong hands after you are gone.
Below are some important documents you may want to review upon your divorce.
You may want to change a few aspects of your will in light of the divorce. For example, consider reviewing things to do with guardianship of your children or the executor of your will if you had included your former spouse in your estate plans. It is highly recommended that you revoke the old will if you intend to change such critical areas.
It is also advisable to change a power of attorney considering the new development in your former marriage.
If you had set a revocable trust, it might be worthwhile to revisit the terms and conditions. Most couples set up joint trusts or name each other as trustees or beneficiaries. If you do not revise the specifics of your trust, your former spouse could end up with your property.
Life insurance, retirement accounts and others
Some assets will go to the designated beneficiary upon your death, even if it’s your former spouse. These may include life insurance policies, bank accounts with a “payable on death” clause, or investment accounts with a “transfer on death” clause. You may want to take another look at such arrangements and adjust accordingly.
Protect your estate and beneficiaries by making solid financial plans
Having a sound estate plan is important to your beneficiaries once you are gone. Therefore, it is crucial to be on top of things regarding the future of your estate, and a smooth transition will go a long way in protecting their future.