Divorce turns our world upside down, doesn’t it? Our once cherished dreams about the future are now nightmares. Some are happy it’s over, some people needed to get out of an abusive relationship, but regardless of how or why there was a divorce, our futures are different than what we once expected them to be. With that change comes the need to change your estate plan, beneficiary designations, and choice of people to act on your behalf during incapacity or death.
Obey Court Orders
First, you must abide by court orders. If you are amid divorce proceedings, there may be a court order that prohibits you changing anything until the divorce is final. If you are going through divorce proceedings, talk with your divorce lawyer before making any changes to your beneficiary designations, last will and testament, or the titles to any assets. Do not disobey a court order. If your divorce is final, it may require you keep your ex-spouse as beneficiary of a life insurance policy or some other financial account. Again, do not disobey a court order. You must not make changes to any beneficiary designations or asset titles if it violates a court order.
Alabama Divorce and Estate Planning
After you ensure you are not violating a court order, either by speaking with your divorce lawyer and/or your estate planning lawyer, there are things you need to do following a divorce. In Alabama, the law automatically revokes your ex-spouse’s right to your property should you die before you change your will. Your ex-spouse will be treated as if he or she predeceased you. Your ex-spouse is also automatically removed as your personal representative (a/k/a executor). However, this should not delay you changing your will. You still need to change your last will and testament, power of attorney, and advance directive to reflect this divorce, a major life change. Now that you’re divorced, you’re not living in the past, you’re moving forward. Don’t leave your estate plan in the past!
7 Estate Planning Considerations When Divorce
Following are general considerations for your estate plan when you divorce. An experienced estate planning lawyer will be happy to discuss these seven things with you to determine if you need to do any or all of these, and prepare the new documents for you.
- Update Your Will: If you have a will, it’s crucial to review and update it to reflect your current wishes. A divorce is a major life change and you should always review and/or update your will after a major life change. Your wishes and goals for your estate has changed significantly because of your divorce. Your last will and testament must reflect those changes. This change may involve changing beneficiaries, executors, and any provisions related to your ex-spouse and stepchildren you may have included previously.
- Review Beneficiary Designations: Check and update beneficiary designations on life insurance policies, retirement accounts, and other financial assets. This is a major consideration, but also where you must abide by court orders. Divorce may affect the distribution of these assets, and you will want to designate new beneficiaries if allowed.
- Power of Attorney and Healthcare Proxy: Review and update documents that grant someone the authority to make financial and healthcare decisions on your behalf if you are unable to do so. You will want to appoint new individuals who align with your current preferences and will have your best interest at heart.
- Trusts: If you have established trusts, revisit them to ensure they align with your post-divorce wishes. As previously stated, you just went through a major life change. With any life change, your will and trust needs to be reviewed and updated as needed. Your trust must reflect this major life change and the removal of beneficiaries, such as the ex-spouse or stepchildren who were previously provided for. Make any necessary amendments to trustees or beneficiaries. A divorce may trigger the necessity for a trust if you have children, particularly minor children. A trust can hold assets for your minor children, appointing a trustee to oversee the distribution of those assets to ensure they are used for the benefit of your children.
- Guardianship for Minor Children: If you have minor children, revisit and update your choices for guardianship. Except in extreme situations, your ex-spouse should have the children if you die while the ex-spouse is still living and your choice of guardian won’t be considered. However, you need to name a guardian for your minor children because there may be a situation in which your ex-spouse will be unable to take them in full time or he or she dies before you do.
- Review Jointly Owned Property: If you and your ex-spouse jointly own property, consider how you want the property to be distributed in the event of your passing. This may involve updating titles and deeds. Hopefully all property was divided during the divorce, but if not, this is a major consideration, and, if not addressed in the divorce decree, you must consult with an experienced estate planning lawyer about how to distribute this property upon your death. You also must be careful to abide by any court orders related to this property. Your estate planning lawyer will need to read your divorce decree to navigate you through this situation.
- Financial Accounts and Debts: Take stock of your financial accounts and debts. Your finances, retirement account, investment accounts, and other financial accounts may have taken a hit during the divorce. Maybe your accounts got a boost! Either way, take stock of those accounts, consult with your financial advisor and your estate planning lawyer as to how you want these to be handled upon your passing and update accordingly. This will likely involve updating payable on death beneficiary designations. You will need to share your divorce decree with the estate planning lawyer so that she can be sure you comply with your court order.
Estate Planning Lawyer Huntsville
If you are going through a divorce or recently finalized a divorce, it is imperative you review and update your last will and testament, trust, power of attorney, and advance directive for health care. Your life changed in a major way. Your priorities, goals, and wishes changed and your estate plan should reflect those changes.
If you recently divorced, contact Tanya at Huntsville Estate Planning Lawyer, LLC to review and update your estate plan to reflect your new life, new wishes, and new goals. You can schedule now through my online scheduling option. Click HERE to schedule now.
