Can I Change My Estate Plan During Divorce?

Divorce is an emotionally challenging time, and adding estate planning complexities to the mix makes it even more difficult. However, addressing your estate plan during divorce proceedings is critical for protecting your financial future.

Key Considerations During Divorce

Align Your Will with Your Pending Divorce

An important first step is ensuring your Last Will and Testament reflects your current situation. If you were to pass away before the divorce is finalized, a process that typically takes years, your assets could go to your ex-spouse or other unintended beneficiaries. Consider naming a trusted family member or creating a trust with a reliable trustee to manage assets for your children.

Update Beneficiary Designations

Beyond your will, review all beneficiary designations on life insurance policies, retirement accounts, and financial accounts. These documents should reflect your pending or new marital status to ensure your assets pass to the people you actually want to receive them.

Understand Legal Restrictions on Changes

Certain modifications cannot be made until your divorce is officially finalized. For example, laws governing spousal pension distribution may restrict when you can make changes. Additionally, if your divorce agreement requires maintaining life insurance to support minor children, you may be obligated to keep your spouse or the designated guardian as the policy beneficiary during this period.

Create a New Will After Divorce

Once the divorce decree is accepted by the court, the best approach is having a completely new will prepared. Rather than making piecemeal amendments, a fresh document is more cost-effective and leaves your estate less vulnerable. A new will revokes the previous document and allows you to name a new executor and guardian for minor children.

Update Powers of Attorney and Health Care Directives

Beyond the will, update your health care directives and medical and financial powers of attorney. These documents designate individuals to make decisions on your behalf if you become incapacitated. During an emotionally charged divorce, the last person you want controlling these critical decisions is your soon-to-be ex-spouse.

Key Takeaway

Working with an estate planning attorney during divorce is essential. Keep your attorney informed about your divorce proceedings so they can provide tailored recommendations to protect you, your children, and your estate both during and after the divorce is finalized. Contact an experienced estate planning attorney to review and update your plan today.