Estate plans can help individuals support their loved ones after they die. Many people choose to establish estate plans to ensure the support and well-being of their spouses and dependent minor children after their passing.
When family circumstances change, people may need to make significant adjustments to their existing estate plan documents. Divorce is one of the scenarios that may motivate people to adjust their existing estate plans. The three changes below are all important for the protection of recently-divorced individuals.
1. Updating beneficiary designations
Spouses are often the main beneficiaries of estate plans. People may leave most of their property to their spouses with the expectation that their spouses should support their children after a tragedy occurs.
Divorced individuals typically need to remove their spouses from their wills or trusts and replace them with other beneficiaries. They may even need to file paperwork with their life insurance company to remove their spouses as the beneficiaries of their insurance coverage.
2. Changing who holds authority
It is quite common for people to empower their spouses in their estate planning paperwork. People may name their spouses as their personal representatives or as a co-trustee.
Most people do not want their spouses to have control over their assets or medical care after a divorce. Divorced individuals may need to select new people to hold positions of authority during trust or estate administration.
3. Drafting powers of attorney
Married individuals have protection in the event of a personal emergency. Their spouses can manage their finances. A spouse is also often the only person with legal authority to make medical decisions on behalf of an incapacitated adult without advance planning.
After a divorce, drafting powers of attorney can be a smart decision. Powers of attorney can designate a trusted individual to handle financial or medical matters on behalf of an incapacitated person. Without a spouse to assume that role, people may be left without appropriate support unless they take action ahead of time.
Recognizing that divorce is one of the scenarios that may make the creation or modification of an estate plan necessary can help people better protect themselves. Most people want to remove their spouses from estate planning documents after divorce and make arrangements for support should an emergency arise while they remain unmarried.