Going through a divorce impacts just about every aspect of your life. You may miss work to attend court. Your relationship with your children or extended family may change. Your financial situation and even your living situation may be in flux. There are so many details to attend to that it’s all too easy to overlook some of the most important considerations during and after your divorce.
You may become so focused on getting through divorce proceedings and moving on with your life that you fail to update your last will or estate plan. That mistake could have serious consequences for your loved ones and children if you don’t address it soon.
Divorce doesn’t automatically change the terms of your will
Unless you were planning to die intestate and allow the state to allocate your assets to your spouse, a divorce will not directly impact the terms of your estate or last will. You will have to adjust the terms of your last will following a divorce in order to remove your former spouse as a beneficiary.
Updating your last will after a divorce protects your assets and your wishes. If you have children, grandchildren, siblings or other relatives, you likely want your assets to benefit them when you die. If you don’t make changes to your last will, those people could end up missing out on those assets, while your ex benefits. You may want to review and update any guardians you have named for your minor children as well.
Don’t forget about your life insurance policy either
Another common financial oversight in divorces is your life insurance policy. Did you name your ex as the beneficiary on the policy in the event of your death? If so, you need to take the time to change it. Whether you obtained it independently or through an employer, you will need to contact the plan administrator and complete paperwork naming someone else as beneficiary for the policy.
If the policy has substantial value and you want those funds to benefit minor children, you may want to consider the creation of a trust. A trust could protect those assets for your children, ensuring that your former spouse will not have access to or control over those funds. This may be a sound option for inheritances intended for minor children as well.
Updating your estate plan helps keep it strong
Any time you remarry, divorce, lose a family member through death or gain a loved one from a birth, you may find yourself in a situation where your will requires an update. Regular review of your estate plan and last will can help avoid issues, such as assets going toward people you no longer have a relationship with.