After a major life change, your estate plans should be updated. This is particularly true after a divorce. Your ex-spouse is likely the beneficiary on most of your assets, and you should get this updated as soon as possible. Here are the different documents that may need updating after a divorce.
Change your health care proxy
A health care proxy makes health care decisions for you in case you become incapacitated. When you were married, your spouse was likely named as your health care proxy. Now that you have split up, consider picking another proxy like a friend or relative.
Pick a new power of attorney
Naming someone as your power of attorney allows him or her to make financial decisions for you, if you become incapacitated. Most former partners do not want their exes controlling their money, so changing your power of attorney to a trusted financial professional, friend or family member is a good idea.
Examine your will and trust
Your ex was also probably your executor or trustee for your will or trust. He or she was also likely a beneficiary in your estate plans. Remove him or her as executor or trustee, and name a new beneficiary for the assets allotted to him or her.
Consider arrangement for minor children
People with minor children should select a guardian for children, in case they pass on. Depending on your former spouse, you may or may not want him or her as the guardian of your children. If your ex was abusive or has substance abuse issues, you should name another guardian. During succession, the court will still likely select your ex as guardian, but an estate planning attorney can fight that in a Louisiana court. You may want to set some money aside to pay for these attorney fees.
You may also want to create a trust to provide for minor children, in case of your passing. If you do not set up a trust, assuming your ex is the guardian, he or she will control any money you leave for your children. According to Forbes, if you do want them in charge of your children’s money, set up a revocable trust.
Update beneficiary designations
With life insurance, you may be required to keep your former partner as a beneficiary even after your divorce. Before you change this designation, have an estate planning attorney review your divorce agreement to see what you have agreed to. If this was not a part of the settlement, ensure you name someone else on your policy.
You will also need to update retirement account beneficiary designations. Your ex was likely the named beneficiary on your 401k or IRA. You may be able to update this information online or with a quick phone call to your broker.
After a divorce, many people feel overwhelmed with all the changes that must be made, like moving, dividing assets and settling custody issues. However, updating an estate plan is crucial because it ensures your minor children are protected, and your former partner is not in charge of making any decisions that you do not want him or her to make.