4 ways to update your estate plan after a divorce
Divorce is more than the end of a matrimonial union; it’s also the beginning of a major legal and financial reset. While most people focus on dividing assets and settling custody agreements, one area that’s often overlooked during this transition is estate planning.
Whether you’re in the middle of a divorce or recently finalized one, your estate plan likely needs significant updates. If left unchanged, your ex-spouse could remain in control of decisions or assets that no longer align with your wishes. What do you need to know to protect your legacy and regain control?
1. Update beneficiaries immediately
One important step you should not overlook after divorce is to update the beneficiaries on your financial accounts. This includes:
- Life insurance policies
- Retirement accounts (like 401(k)s and IRAs)
- Payable-on-death (POD) bank accounts
These designations override your will, meaning that if your ex is still listed, they may receive those funds regardless of what your updated estate plan says.
Don’t forget to revisit these forms because your divorce decree does not handle everything. You must update each account separately to help ensure your assets go to the right people.
2. Revoke or revise wills and trusts
Suppose your will or trust names your ex-spouse as executor; you should revise this after divorce. Revoking your old will and drafting a new one is the cleanest way to reset your estate plan. The same goes for trusts. If you and your ex created a joint trust during your marriage, you’ll need to determine how to split or terminate it. Once this is done, you can set up a new trust to reflect your post-divorce intentions.
3. Address joint ownership of property
Suppose you owned property jointly with your now ex-spouse; after divorce, you may still co-own property like a house or investment account. Failing to change the ownership structure could result in your ex inheriting that property if you pass away unexpectedly.
4. Appoint new decision-makers
Suppose you chose your spouse to make medical and financial decisions on your behalf if you’re incapacitated; you’ll likely want to name someone else after divorce. Review and update these designations to reflect someone you trust with your health and finances.
Divorce reshapes your future in many ways, and your estate plan should reflect your evolution. By enlisting informed legal support to update your documents and make strategic changes, you can help ensure your assets are protected and your loved ones are provided for.