Divorce brings significant changes to every aspect of life, including your estate plan. Many people create wills, trusts, and other estate planning documents while married, often naming their spouse as a primary beneficiary or decision-maker. After a divorce, it’s crucial to review and update these documents to ensure they reflect your new circumstances and wishes. Failing to do so can lead to unintended consequences, such as an ex-spouse inheriting assets or making medical decisions on your behalf.
If you’ve recently gone through a divorce, here are the key estate planning updates you should make as soon as possible.
1. Update Your Will
Your will dictates how your assets will be distributed upon your death. If your former spouse is listed as the primary beneficiary or executor, you may want to make changes to prevent them from inheriting your estate or managing your affairs.
When updating your will, consider:
- Naming new beneficiaries to replace your former spouse
- Choosing a new executor to oversee your estate
- Reviewing guardianship designations if you have minor children
In many states, divorce automatically revokes provisions in a will that benefit an ex-spouse, but it’s still best to revise your will to avoid any legal complications.
2. Revise Your Trusts
If you have a revocable living trust, your former spouse may still be listed as a trustee or beneficiary. Review and update your trust documents to:
- Remove your ex-spouse as trustee if they were managing assets on your behalf
- Change beneficiary designations to reflect your new wishes
- Ensure any new financial or legal arrangements are properly documented
If you have minor children, you may want to establish a new trust to ensure that assets are protected and managed according to your wishes, rather than being controlled by your ex-spouse.
3. Update Beneficiary Designations
Certain assets, like life insurance policies, retirement accounts (401(k), IRA), and payable-on-death bank accounts, pass directly to named beneficiaries—regardless of what your will says. Many people forget to update these designations after divorce, which means an ex-spouse could still inherit these funds.
Check and update the beneficiary designations for:
- Life insurance policies
- Retirement accounts (401(k), IRA, pension)
- Payable-on-death (POD) bank accounts
- Transfer-on-death (TOD) investment accounts
If you’re unsure how to update these, contact your financial institution or employer’s HR department for guidance.
4. Change Your Power of Attorney & Healthcare Directives
A power of attorney (POA) allows someone to make financial or legal decisions on your behalf if you become incapacitated. Similarly, an advance healthcare directive (living will) appoints a person to make medical decisions for you if you’re unable to do so.
Many married people name their spouse as their agent in these documents. After a divorce, update them to:
- Appoint a trusted family member or friend instead of your ex-spouse
- Ensure your healthcare wishes are documented clearly
- Avoid potential conflicts in case of a medical emergency
Failing to update these documents could result in your former spouse having control over major financial and medical decisions.
5. Review Your Child’s Guardian Designations
If you have minor children, your ex-spouse will likely remain their legal guardian. However, if you were the sole guardian or have concerns about your ex’s ability to care for them, you may need to update your estate plan.
Consider:
- Naming a trusted person to manage your child’s inheritance through a trust
- Outlining specific instructions for your child’s financial well-being
- Consulting with an attorney if there are custody concerns that impact estate planning
6. Protect Your Assets from Future Claims
After a divorce, you may want to ensure that your assets are protected from future claims. This can include:
- Creating a trust to safeguard assets for children or other family members
- Establishing prenuptial or postnuptial agreements if you plan to remarry
- Ensuring property ownership records reflect your new marital status
Updating your estate plan after a divorce helps prevent legal battles, unintended inheritance, and financial complications in the future.
Final Thoughts
Divorce is a major life change that requires a thorough review of your estate plan. Taking proactive steps now can help ensure your assets go to the right people, your healthcare decisions are made by someone you trust, and your children’s future is secure.
Working with an experienced estate planning attorney can help you navigate these updates and make sure your new plan aligns with your wishes and legal requirements. By taking the time to update your estate documents, you’ll gain peace of mind knowing your affairs are in order and your loved ones are protected.
