No one plans to get divorced when they marry, but unfortunately, it happens. Divorce is well-known as one of the hardest things to go through in life, especially if children are involved. It’s a life-altering event that affects you emotionally and financially. While estate planning may not be able to help with the emotional aspects of divorce, it can help protect your beneficiaries and lessen the impact on your financials.
One of the most significant concerns most people have when going through a divorce is whether the ex-spouse will have control of your assets when you die. Failing to update your estate plan after a divorce could leave your hard-earned assets in the control of your ex-spouse, and they will be able to dictate what happens to your remaining property when you die. This is not something that most people want to happen unless you have children together, and your ex-spouse will use the funds to care for the children you have together. This article will explain what happens during and after a divorce with estate planning and discuss many of the common questions people have regarding estate planning and divorce.
Do I Need to Update My Estate Plan After Divorce?
The short answer is yes, you should update your estate plan after a divorce. You should speak with an attorney once you are notified that you will get a divorce to ensure you do everything you need to protect your financial future. It’s important to note that divorce typically nullifies many provisions in your estate plan regarding your ex-spouse. However, there are other aspects, such as life insurance beneficiaries, that you may want to change if you have your ex-spouse listed as a beneficiary. Also, your will should be updated, especially if you had your ex-spouse designated as your executor. It’s also important to revoke any powers of attorney that name your ex-spouse unless you wish them to remain as your POA.
Here are a few reasons why you should review and revise your estate plan after a divorce:
1. Update Beneficiaries: An estate plan determines and instructs the court who will inherit your assets when you die. Most married people name their spouse as a beneficiary on their accounts. This list of accounts may include retirement accounts, life insurance policies, trusts, and even bank accounts. Designated beneficiaries on many accounts can receive your property when you die without going through probate. Failing to update your beneficiaries after a divorce will allow your ex-spouse to inherit that portion of your estate. Most people would not be happy with this outcome and choose to update their beneficiaries.
2. Protecting Your Children’s Financial Future: Your children’s financial future should be one of your top priorities when going through a divorce. This is especially true if your ex-spouse was your children’s stepparent. Many divorced people remove their ex-spouse as the beneficiary of their accounts and name their children. This will ensure they are cared for with your funds, and your ex-spouse cannot take it from your children.
Will My Ex-Spouse Inherit If I Don’t Revise My Estate Plan?
In many jurisdictions, laws are in place to prevent ex-spouses from inheriting from your estate unless you state otherwise in your estate plan. However, it depends on your jurisdiction and the type of assets. Here are a few things to consider:
Trusts and Non-Probate Assets
Not all assets are required to go through probate, and the beneficiary listed can inherit. For example, life insurance policies, assets held in trusts with designated beneficiaries, and retirement accounts typically are not subject to probate. Your ex-spouse can inherit these assets if they are listed as the beneficiary, even if your will states otherwise. You must be proactive and take the appropriate steps to exclude your ex-spouse entirely from inheriting your assets.
Can My Divorce Attorney Help?
If you’re going through a divorce and have hired a divorce attorney, you may be tempted to let them handle your estate plan revision. However, not all attorneys understand estate planning and the pitfalls to avoid. An estate planning attorney will be able to explain your options and walk you through the process of reviewing and revising your estate plan to ensure your ex-spouse cannot inherit from your estate unless you want them to.
Contact an Attorney
Progeny Law Firm assists clients with estate planning in Baton Rouge, LA. Call (225) 465-1090 or contact us online for a free consultation.
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