If you have recently divorced, you should update your estate plan right away. If you divorced years ago, it may be a good idea to review your estate plan to be sure it is current and adequately reflects your wishes. This is especially important if you did not make changes at the time or cannot remember whether you reviewed your estate plan or not.
According to Forbes, many of the changes you may want to make following your divorce involve removing your ex-spouse from beneficiary or fiduciary roles. Here are some other important things to review.
1. Life insurance requirements
In many cases, the divorce agreement requires that one ex-spouse maintain the other as a beneficiary of his or her life insurance policy regardless of remarriage. Review your divorce agreement to be sure of exactly what it says before changing life insurance beneficiary designations to remove your ex-spouse.
2. Have a trust for your children
In many cases, your ex-spouse becomes the children’s guardian in the event of your death. However, if you create a trust to benefit your children, you set aside that money for them, and your ex-spouse cannot control it. When you create a trust, you get to choose the trustee who is in charge of taking care of the assets for your children.
3. Update advance directives
Even if you and your ex-spouse split amicably, you may not want him or her making decisions on your behalf if you become incapacitated. You can update these documents to give decision-making authority to a close relative or trusted friend instead.
It is possible to update most estate planning documents at any time, as often as necessary. However, because life is unpredictable, you should take care of these changes as soon as possible following the finalization of your divorce.
