Divorce and Estate Planning
- Posted in: Estate Planning
Most of us, when we think about divorce, tend to think about people in court, couples fighting, and moving trucks pulling away from the family home; very few people going through a divorce think about their estate plan. But the fact is that you may well need to or want to put your signature on a new or updated estate plan before you put your signature on your official divorce papers.
A divorce or separation can sometimes take months—or even years—to become official. For example, there is a minimum of 6 months “waiting period” in California. The financial settlement can take even longer. But if you are going through a divorce you likely want your ex-spouse removed from any position of authority in your life as soon as possible. This would include the authority to make financial decisions (as your co-trustee or agent in your Power of Attorney), the authority to make healthcare decisions (as your healthcare agent), or the authority to make decisions about the final disposition of your property (as the executor of your will.)
Another common mistake made during a divorce is neglecting to remove your ex-spouse as the beneficiary of your life insurance policies or retirement accounts. By putting off this chore you could inadvertently leave a large percentage of your assets to your ex.
The good news about the process of changing your estate plan during a divorce is that it gives you a modicum of control when the rest of your life may seem out of control. Knowing that your estate plan has been changed, and reflects the priorities of your new life rather than your old, can be an island of serenity in the middle of a storm.