You and your spouse are in your 50s. The kids have moved out of the house; one even moved out of the state. You own your home outright, so there’s no mortgage. You paid off all of your other debt, from student loans to car loans.
All in all, you feel like it’s going to be an easy divorce. You don’t have to worry about what to do with the house, child custody or child support — three of the biggest questions most people face when splitting up.
Don’t assume that means there’s almost nothing for you to do. This is still a huge change, both in an everyday sense and legally speaking. It’s going to have an impact that reaches out like a wave to touch on other legal decisions you’ve already made.
For instance, have you considered how the divorce will change your will and your estate plan? Below are a few important documents you may need to update:
Your legal power of attorney
The legal power of attorney authorizes someone else to make decisions for you and take action on your behalf. A common example is giving that person power to access your investments and bank accounts. You can set this up to take effect only if you’re unable to do these things on your own. If the person you chose is your spouse, you’ll want to change it when you split up.
Your medical power of attorney
The medical power of attorney is similar, though it relates to medical decisions such as what treatment to authorize and if you should be resuscitated. Again, you can set it up so that you hold this power until you’re incapacitated or otherwise unable to make your own choices.
Your will divides your assets and gives final instructions to your family. Odds are you’ll want to remove your ex. You may also have other family members on his or her side — like your ex’s niece or nephew — whom you want to cut out.
It is worth noting that some provisions in your estate plan are automatically revoked if you get divorced. For instance, if you pass away in a car accident the day after your divorce, before you update the will, part or all of the provisions involving your spouse may get revoked.
Even so, it’s still wise to update everything to be sure your new estate plan takes into account your new assets and your current situation, rather than relying on an outdated plan.
Plus, not all estate planning documents are subject to this law. For instance, perhaps you set up an irrevocable life insurance trust (ILIT). If you don’t update it, it will still stand, even though you’re divorced. Make sure you know exactly what state laws apply to which documents and what updates you need to make.