Going through a divorce can be a traumatic and lengthy process. By the time you are done you likely do not want to think about anything related to your divorce; however, you should take the time to consider how your divorce affects your estate plan. Failing to do so could have significant unintended consequences. To make sure you do not end up in that position, a Murfreesboro divorce attorney at Bennett, Michael & Hornsby explains what you need to know about divorce and your estate plan.
Marriage, Divorce, and Estate Planning
As a married couple, you and your spouse probably created estate plans based on your status as a married couple. You likely designated each other as the beneficiary of insurance policies, retirement plans, and joint bank accounts as well as gifted significant assets to each other as part of your overall estate plan. Your spouse may also be named to important fiduciary roles in your estate plan, such as the Executor of your Will, Trustee of a Trust Agreement, or Agent in a Power of Attorney. If you have children together, much of your joint estate plans were likely geared toward providing for and protecting your children if something happened to one of you.
Now that you are divorced, however, the rational used to make decisions in your existing estate plan no longer applies. More importantly, failing to address that fact could result in an estate plan that still leaves important assets to a now ex-spouse, leaves your former spouse in control of probating your estate or administering a trust you established, or even has your ex-spouse making life and death healthcare decisions for you if you are incapacitated. To prevent this from happening, you need to review and revise your estate plan during and/or after your divorce.
What Needs to Be Updated When I Divorce?
Exactly what needs to be updated, and when it should be updated, will vary, depending on the details of your estate plan, the terms of your divorce settlement, and applicable state and federal laws. Common estate plan updates related to a divorce include:
- Last Will and Testament. You will likely want to remove your spouse as a beneficiary under the provisions of your Will as well as appoint a new Executor.
- Trust Agreement. If your plan includes a trust agreement, and you appointed your spouse to be the Trustee of the trust, you may need to amend the trust agreement to appoint a new Trustee. You may also need to amend the terms of the trust if trust property was distributed in the divorce, or your spouse was a beneficiary of the trust.
- Life Insurance Policies. If your spouse is the primary beneficiary of your life insurance policies, you may need to change your beneficiary designations. Be careful, however, because the terms of your divorce may require you to continue to maintain life insurance that names your spouse as the beneficiary if you have minor children with your spouse.
- Retirement Accounts. Your spouse is also probably named as the beneficiary of your retirement/pension accounts. As is the case with life insurance, the terms of your divorce as well as applicable state/federal laws may impact your ability to make changes to these accounts so be sure to consult with your divorce attorney before doing so.
- Power of Attorney. If you executed a Power of Attorney that names your spouse as your Agent, you may need to revoke that POA as soon as possible.
- Advanced Directives. If you have an advance directive in place, you probably named your spouse as your Agent. That gives your spouse the legal authority to make healthcare decisions for you if you are unable to make for yourself. Unless you still want your (now ex) spouse to have that authority, you should revoke that document and execute a new one naming a new Agent.
Contact a Murfreesboro Divorce Attorney
If you have questions or concerns about divorce and your estate plan, contact a divorce attorney in Murfreesboro, Tennessee at Bennett, Michael & Hornsby by calling 615-898-1560 to schedule your free appointment.