Divorce is inherently an emotional time. As the financial toll of a legal separation looms overhead, it is easy to overlook the need for a new estate plan. Issues such as child support, custody, and property division can dominate your train of thought, causing you to lose sight of your long-term future.
While your divorce is pending, you are still technically married, meaning, that your spouse may have authority to control your medical care should you become disabled. In the event of your death, your spouse is likely to inherit your property under a prior will or the laws that regulate the distribution of your estate if you do not leave behind a will. If you have previously given your spouse authority under power of attorney, he or she could abuse that power to sell your property or borrow money in your name – possibly leaving you with no recourse.
After a divorce, your ex-spouse is treated as though having died before you and is effectively taken out of the will. However, even though your spouse may not directly inherit from you, he or she may do so indirectly. If you have children who are minors at the time of your death, the court is likely to appoint your ex-spouse as their guardian and conservator. Accordingly, he or she would also have complete access and control to any property left to minor children.
While the law provides some protection for a will or trust, it may not do so for most of your property. Property, such as retirement and investment accounts, goes to beneficiaries designated for those accounts, not in your will. Failing to update these designations after a divorce may mean your ex-spouse will receive your largest assets after your death.
It is imperative to review your estate plan with your attorney during a divorce to avoid this situation. While the process can be overwhelming, do not overlook this critical part of your future. Divorce is a major life change and it may be necessary to revoke prior documents and establish a new plan. A new estate plan will allow you to plan for your future and provide much needed peace of mind.