Just as marriage will change your approach to estate planning, the same holds true of divorce. If you find yourself heading down this path, it’s critical that you review your estate plan and alter it accordingly.
While this means something different to everyone, here are some of the ways divorce may change your estate plan:
- Advance health care directives: If your ex-spouse has the power to make medical decisions on your behalf, for example, it’s important to revisit this. You may want to choose someone else, such as your new spouse, an adult child or a sibling, to take on this potentially big responsibility.
- Beneficiary: While you’re married, you may make the decision to leave everything to your spouse upon your death. But if you get divorced, this all changes. You’ll probably want to remove them as a beneficiary and name someone else, such as your children.
- Life insurance: It’s common to name your spouse as the beneficiary of your life insurance policy. This allows them almost immediate access to funds in the event of your death. If you divorce, you probably don’t want this person to receive your death benefit. You want it to go to someone who is responsible for managing your final expenses.
Divorce can and will change your estate plan. While it may be something you’re putting off, don’t wait too long. If you do, you’re taking a big risk with your future, as your ex-spouse may retain some control and or right to your estate upon your death. As you review and alter your estate plan, make sure that you have qualified assistance throughout the process.