Estate Planning after a Divorce
Finalizing your divorce should not end when you get your divorce decree. It is likely that major changes need to be made to your estate plan after you finalize a divorce. Working with an attorney to update your estate plan should always be the next step. After a divorce, ownership and beneficiary designations should be reviewed. Some divorce decrees will require you to keep your ex-spouse as a beneficiary or award them rights upon your death in your retirement accounts.
If you completed estate planning while married, and your Last Will and Testament names your ex-spouse as a beneficiary, Indiana law will automatically treat your ex-spouse as being predeceased, meaning the provisions naming them as a beneficiary will be voided. This only applies when the divorce is finalized, and will not apply in cases where the parties have filed for legal separation or have a dissolution proceeding pending. It is recommended to review and update your estate plan both when you file for divorce and when your divorce is over since some divorces can be pending for years.
It is important to review your beneficiary designations on life insurance, retirement accounts, and brokerage and investment accounts after a divorce. Most beneficiary designations naming your ex-spouse will still be valid even after a divorce. Forgetting to change the beneficiary designation from your ex-spouse could result in your ex-spouse receiving significant amounts of money when you pass away. A Last Will and Testament does not control these beneficiary designations so merely updating your estate planning is not sufficient.
In addition to updating your Will, you should also update any advance directives or powers of attorney you have executed naming your ex-spouse as your power of attorney. You should review your personal representative designation if your spouse was designated. If you and your ex-spouse have minor children, you should create or review any trust you have set up for the benefit of your minor child and determine whether you want your ex-spouse to be in control of the property left to your minor child in trust or if you want another individual to act as trustee. If you have not created a trust and have minor children, you should work with an attorney to discuss the best way to provide for your minor children after a divorce.
You should make sure that you update ownership on your accounts and property to reflect the provisions of the divorce decree. Failing to update your accounts can cause enforcement issues later on, and you may find yourself back in Court fighting with your ex-spouse over a provision issued in your divorce decree many years prior.
While dealing with estate planning at the same time you are dealing with a divorce can seem overwhelming, it will provide you with protection and peace of mind.
If you have questions about your estate planning, please contact the attorneys at Slotegraaf Niehoff, P.C. located in Bloomington Indiana.