Going through divorce proceedings is never easy. With the financial and emotional issues taking top priority, updating your current estate plan may not even enter your mind as something that needs to be addressed. If it is not modified after the divorce, you run the risk of not having your assets distributed as intended. The following steps need to be taken to ensure your estate plan coincides with what you really want.
Make a new will. Destroy the will you have, tearing it up is sufficient. Design a new will to fit your current wishes. Your will should include:
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Listing the beneficiaries to your assets and property. It is also wise to select an alternate beneficiary in the event the initial person is no longer living.
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In many states, gifts you make to your spouse are revocable upon your death. Know the laws in your state concerning gifts made to your now divorced spouse. Having a will can clarify who you want to leave your important assets.
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Before you were divorced, the beneficiary of your will was probably your spouse. If you do not want your ex-spouse to take ownership of your property, you definitely do not want them to be the executor of your estate. If you do not make a new will, this could happen. Many states have laws that say once you are divorced, the existing will that lists the spouse as the executor is revoked. The responsibility then goes to the alternate executor. However, this can vary from state to state so contact an estate planner to discuss changes to your executor if you find yourself in this position.
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If you have children under 18, name a guardian for them in your wll. If you do not, and both parents are deceased, a court will appoint one for you. You probably cannot prevent your ex-spouse from getting custody of the children if you die even if you think they are not an appropriate caregiver. If you feel that strongly, you can write a letter containing your concerns and attach it to your will. The judge will be able to read it and possibly take the letter into consideration
Update Your Designated Beneficiaries. There are a lot of assets you possess that do not need a will to execute. If you get a divorce remember to update the beneficiaries for these accounts:
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Investment accounts — 401(k)s, IRAs, etc.
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Life insurance policies
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Brokerage accounts
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Bank accounts that have the designation ‘pay-on-death’
Request new documents from your brokerage, employer, bank or life insurance provider as soon as you can. Never assume the terms of the divorce or any state laws concerning divorce will automatically void any previous beneficiary designations. Many policies are governed under federal laws that state the administrator of the plan is required to give the funds to the beneficiary that is names in the plan documents, in spite of state law requirements. Your safest bet is to do the paperwork to change the beneficiary.
Update any powers of attorney. Destroy any powers of attorney or health directives that list your ex-spouse as the designated party. Redo the documents with a new designated authority.