If you’re divorcing, it’s important to review your estate plan as early as possible, for two reasons. First, you may wish to revise your plan immediately to prevent your spouse from inheriting or gaining control over your assets if you die or become incapacitated before the divorce is final. Second, although a divorce judgment or settlement automatically extinguishes certain of your former spouse’s rights, some documents must be modified to ensure that he or she doesn’t receive unintended benefits.
Consider revising your will and any revocable trusts to exclude your spouse. Note that, in many states, your spouse will retain elective share or community property rights to a portion of your estate until the marriage ends. However, revising your will or trust will limit your spouse to the legal minimum if you die before the divorce is final.
Other actions to consider:
- Change beneficiary designations in IRAs, life insurance policies, annuities or retirement plans (note that federal law prevents you from removing your spouse as beneficiary of a retirement plan, without his or her consent, until the divorce is final)
- Revise payable on death (POD) or transfer on death (TOD) designations in bank or brokerage accounts
- Revoke powers of attorney or health care directives naming your spouse as an agent
- Establish trusts for your minor children to govern assets they may inherit from you to limit your former spouses involvment and control, if you wish to do so
In light of this major life event, don’t hesitate to turn to us. We can review your estate plan and recommend any revisions necessary because of the divorce.