Why it is Critical to Update (or Make!) Your Estate Plan After Divorce
A divorce is often an emotionally and financially unsettled time, and, understandably, estate planning may be your last priority when you’re facing the breakup of your marriage. However, once your divorce is final and things have settled down (and you are less weary of looking at legal documents!), it’s important to turn your attention to your estate documents to make sure they reflect your current wishes. You are at one of the most important times in a person’s life to update an estate plan – or to create one. If you don’t, your assets might not be distributed in the way you would have wished. They may either wind-up going to your ex-spouse or the state will decide who inherits your assets.
Fortunately, working with Freed Marcroft to update or create an estate plan is usually simple, straightforward and can be completed efficiently. Our background in matrimonial and family law, in addition to estate planning, uniquely situates us to understand the special issues and considerations in post-divorce estate planning.
Even after the most amicable divorce, most people need to put in place new wills, powers of attorney, and healthcare directives. In addition, bank and brokerage accounts with “pay on death” provisions will need to be updated, as will beneficiary designations for individual retirement accounts, 401(k)s, other retirement plans, annuities and health savings accounts. Finally, formerly joint assets, like real estate or vehicles, which became solely yours in the divorce, must be retitled into your own name alone.
If you had an estate plan while you were married, it is critical to update your plan
Documents and beneficiary designations you made when you were married do not automatically change in the event of a divorce: you have to take action. So, for example, when you were married you may have named your spouse your sole beneficiary, executor, power of attorney, and healthcare agent. However, now that your marriage has ended, you may not want your ex to inherit all your assets, have access to your finances, or make healthcare decisions for you. Nevertheless, if that’s what your (now outdated) will directs, that is exactly what will happen.
If you haven’t updated your estate planning documents post-divorce, your former spouse – rather than, for example, your children – is quite likely still your primary beneficiary. Even if you haven’t been married for years, if your will, healthcare directives, or power of attorney currently list your former spouse in an authority position, then he or she is still designated to take on that role.
If you didn’t have an estate plan while you were married, it is critical to create one
If you did not have an estate plan during your marriage, you must prepare one following a divorce. Before Freed Marcroft’s lawyers design your estate plan, we will spend time together learning your goals and objectives and discussing any concerns you have. Absent one, you aren’t in control of where your assets will go, who will be in charge, or who will make decisions for you. In Connecticut, if you die without a will, the state will determine where your estate goes under state “intestate succession” laws. Freed Marcroft can assist you in avoiding the potentially undesirable consequences of these laws and allow you to create a will and other related documents that reflect your new wishes. As part of the process you will also choose who you would like to handle your estate and make healthcare decisions for you in the event you are incapacitated. (If you pass away without an estate plan, the court will pick someone for you.)
Whether you are updating or creating your estate plan, please contact Freed Marcroft to get started.