Divorce brings significant changes, not only to your day-to-day life but also to your long-term plans and protections. One of the most important steps to take after a divorce is revisiting and updating your estate plan.
At Entz Burton & Associates, we help clients ensure that their assets, wishes, and loved ones are properly safeguarded as they enter this new chapter. An estate plan created during your marriage may no longer align with your intentions, and failing to update it can lead to unexpected consequences. Call us at 405-773-9800 to schedule a consultation with an estate planning lawyer now.
How a Divorce Might Affect Your Estate Plan
Divorce impacts almost every part of an estate plan that’s why you need to update it. If your former spouse was named as a beneficiary, executor, or trustee, these roles may need to be reevaluated. Divorce laws vary by state, but in many cases, provisions for an ex-spouse are automatically revoked once the divorce is finalized. However, other parts of your estate plan, such as guardianship designations, retirement accounts, and health directives, won’t change automatically and require your attention.
Your estate plan may include assets such as a home, investment accounts, retirement funds, and personal belongings. Divorce might change who you wish to inherit these assets or oversee their management. Failing to update your estate plan could result in unintended distributions, where your assets end up benefiting individuals who are no longer central to your life. When you work with an estate planning attorney, they won’t let that happen. They will go through every folder and file to make sure your plan is up-to-date.
Updating Your Estate Plan After Divorce
Updating your estate plan after a divorce is essential. Here’s a checklist of what to review and update:
1. Revise Your Will
Remove your ex-spouse as a primary beneficiary and executor unless you wish to keep them in these roles. Carefully select a new executor to manage your estate, ideally someone who understands your wishes and can act responsibly. If you have minor children, designate a guardian in your will to ensure their care aligns with your values.
According to the Oklahoma Bar Association, you can change your will by writing a new one or amending the existing document with a codicil.
2. Update Beneficiary Designations
Certain accounts, like life insurance policies, retirement accounts, and payable-on-death bank accounts, pass directly to named beneficiaries, bypassing your will. Contact each financial institution to update these designations and ensure your assets go to your intended recipients.
3. Create or Update Your Trusts
If you have a trust, review it to confirm that your ex-spouse is removed as trustee or beneficiary if that’s your wish. If you don’t have a trust, consider creating one, especially if you have minor children or significant assets. A trust can protect your children’s inheritance, allow for controlled distributions, and reduce probate complications.
4. Review Powers of Attorney
If your ex-spouse is listed as your financial or healthcare power of attorney, revoke those designations and assign new individuals you trust. Powers of attorney grant someone authority over financial and healthcare decisions on your behalf, so choose someone who aligns with your values and interests.
5. Update Your Healthcare Directive
Ensure your ex-spouse is no longer listed as your healthcare proxy if that’s your preference. Update your healthcare directive or living will to reflect your current wishes, including preferences for medical treatment and end-of-life care.
6. Reassess Guardianship for Minor Children
While a divorce won’t automatically impact guardianship designations, you may want to specify a preferred guardian in your will if you pass away while your children are still minors. Speak with your estate planning attorney to understand how your preferences might interact with custody arrangements.
7. Consider Tax Implications
Divorce can impact your tax liabilities, especially concerning estate taxes. Your attorney and financial advisor can help ensure your new estate plan is tax-efficient, particularly if you receive significant assets in the divorce.
8. Reallocate Digital Assets
Digital assets like online accounts, digital property, and social media are increasingly part of modern estate plans. Update access permissions, and consider creating a digital asset management plan to ensure your online presence is handled according to your wishes.
What Happens If You Don’t Update Your Estate Plan After Divorce
Failing to update your estate plan after divorce can lead to unintended consequences. Without revisions, your ex-spouse might still receive certain assets or retain decision-making powers. For example, if they remain listed as your power of attorney or healthcare proxy, they could make financial or medical decisions on your behalf. Outdated beneficiary designations on retirement accounts and life insurance policies may lead to distributions that don’t reflect your current intentions.
Moreover, if you don’t name a new guardian for your minor children, a court could make this decision without your input. By not updating your estate plan, you risk a misalignment between your current wishes and the legal instructions guiding your estate. You might want to consult with an estate planning lawyer to know what parts of your estate plan require your attention after divorce. Attorney J. Michael Entz is committed to his client’s concerns and needs when it comes to making changes to an estate plan or creating a new plan from scratch.
Take Control of Your Future with Entz Burton & Associates
At Entz Burton & Associates, we’re here to guide you through the estate planning process after divorce. Updating your estate plan can give you peace of mind, knowing that your assets, loved ones, and legacy are protected according to your current wishes. Reach out to us for a consultation, and let us help you create an estate plan that reflects your new life and goals. Speak with an estate planning attorney now by calling us at 405-773-9800 or contacting us online.
Comments 0