Reviewing estate plans after divorce is a necessity. In most cases, a divorce will affect the beneficiary designations desired by both spouses on the estate.
If divorcing couples have children, they must make sure that any family estate that they have will both protect and provide for those children. Estate plans are sometimes automatically altered by a divorce. They must therefore be looked over by both spouses after the divorce to ensure that legal setbacks in the future will be avoided.
Divorcing spouses should ask themselves the following four questions when determining how their family estate will be affected:
How can you be sure that your home and life insurance benefits will get passed on to your children?
When couples remain married, it is usually taken for granted that all benefits will go on to the surviving spouse and who will in turn use them to benefit the children. However, divorce can cause a spouse to lose confidence that the children will properly benefit from estate and home and life insurance proceeds.
Fortunately, you can establish a trust instead of an estate if you want all of the benefits to go directly to your children. You'll need to bring up this issue with your spouse, accountant, and lawyer.
Who will care for your children if something happens to you?
If you have custody of your children after divorce, you may feel concerned that there will be no one to care for them if something happens to you. Sometimes, one spouse is granted custody because the other is considered unfit as a parent by divorce court. You can revise your estate plan to specify who will serve as guardian in your place.
Will remarriage change estate plans again?
Before remarrying, you need to be aware of the fact that your new spouse may automatically be given rights over your estate in place of your children. If you don't want your estate proceeds to go to your new spouse, you'll need to have a premarital or prenuptial agreement drafted.
Which documents do you need to update?
One of the most important things you need to know to get your estate affairs in order after divorce is what documents need to be reviewed. Any adjustments you make to your estate plans will involve filling out the appropriate paperwork.
The following documents should all be looked over to avoid conflict and ensure the financial stability of your family into the future: wills, revocable trusts, powers of attorney, insurance policies, living wills, properly titles, beneficiaries designated on retirement accounts, and bank/brokerage accounts. Talk to an expert like Mercedes O Chut PA for more information.