Estate Planning After a Divorce

Whichever way you look at it, divorce is very complicated thing to go through. Even if all things unfold as best as they can, divorce means major changes in life and that can be tough. Although it is a heavy emotional time, it is important to handle all things administrative and logistical during or soon after divorce which includes revising your estate plan and making sure to take all applicable documents into account from your will or trust to your health directive. At GoodTrust, we are dedicated to providing you with estate planning tools that are easy, comprehensive and, most importantly, revisable. The following is a step by step plan on how to review, revise, and instate your new estate plan after a divorce.

Step 1: Review and update any estate plan you had in place

If you have an estate plan in place such as a will, it's important to review it. If you and your ex-spouse created an estate plan together, odds are you named each other as your will executors. You may want to update this and pick a sibling or lifelong friend instead, for instance. Another important thing to take a look at after you get a divorce is the beneficiary of your life insurance policy, should you have one. Note, you may not need to change anything but you need to make sure you know exactly what it says so you may revise it as needed.

Step 2: Create your new will or trust

If you and your spouse didn’t have an estate plan established during your marriage, divorce is a great time to create your first one. You’ll want to make sense of the differences between a will and trust in order to make an informed decision regarding which type of estate plan is best for you. A will operates as a legal document that records your wishes for how your assets and property ought to be distributed between your beneficiaries and a trust functions as a legal transference of said assets and property. Read more about the difference between a will and a trust, here. 

Step 3: Revisit guardianship for minor children 

If you have minor children, you may want to revisit your guardianship selections, as they may have changed. Use a will or trust to name a guardian for your children. While this may make you consider the unthinkable, it is arguably one of the most important decisions you can make. For tips on how to choose the right guardian for your children, read more here.  

Step 4: Revisit or create your Health Care Proxy and Health Care Directive

During marriage, your spouse often acts as your healthcare proxy. But if the marriage ends, it's crucial to take control of your healthcare decisions. You might need to appoint a new healthcare proxy to ensure that someone you trust makes decisions on your behalf if you're unable to. A healthcare directive is not just a document; it's a way to communicate your wishes clearly and relieve your loved ones of the burden of making tough decisions during difficult times. Don't leave your health to chance. Discover the importance of healthcare directives and take the first step in securing your well-being by starting yours today, right here. 

Step 5: Revisit or create your Financial Power of Attorney

A power of attorney is a legal document that authorizes a trusted individual to make financial decisions on your behalf. Typically, spouses appoint each other for this role. However, following a divorce, it's essential to reassess this choice. Ensuring that your financial power of attorney is in the hands of someone you currently trust is crucial for the protection and proper management of your assets, especially in unexpected situations. Reviewing and updating this document post-divorce ensures that your financial matters will be competently and reliably managed according to your present wishes and needs.

Once you’ve completed these steps, make sure to do a thorough review of each decision. Additionally, we at GoodTrust recommend updating your estate plan after any major life change to make sure it is consistently reflective of your most current wishes. Our estate planning tools are easy to use, comprehensive, and most importantly revisable whenever a big event like those aforementioned occurs. Take advantage of our tools and get started today.