If you’re preparing to divorce, it may seem like you’ve got a to-do list a mile long. Don’t forget to include updating your estate plan on that list.
While the thought of dealing with any more documents and legal matters may be understandably unpleasant, you don’t want to put off crucial modifications. Otherwise, things could be in disarray if something happens to you before you can get around to it.
Timing is important. Some changes you can make before the divorce is finalized. Others need to wait.
Here in Arizona, the law automatically revokes spousal inheritances and fiduciary responsibilities upon divorce. However, you still want to ensure that your documents reflect those you want in your soon-to-be ex’s place. Otherwise, the court will have to appoint people. So, what needs to be updated?
Powers of attorney and other administrative designations
These are things you can typically change at any time. If your current spouse has power of attorney (POA) over health care, for example, you likely don’t want that to continue. The same is true if you’ve designated them to be the executor of your estate or the trustee of any trusts. It’s time to consider whom you want to have those responsibilities.
Whether your will is the primary estate planning tool you’ve used to designate where your assets or going or not, it may be better to have it completely rewritten after your divorce. Typically, you won’t want to put a new will in place until the divorce is final. If your living trust is your primary estate planning document where you list your beneficiaries, the same is true of that as well.
Beneficiary designations on accounts and insurance policies
The designations you list on your investment and retirement accounts and insurance policies override what you have designated in your estate plan if they’re different. Therefore, it’s crucial to make the changes directly with those who hold the accounts or policies.
These updates will likely need to wait until your divorce is final as well. You’ll probably be dividing your retirement accounts in your divorce. Further, you may be required to keep or take out a life insurance policy if you are ordered to pay child and/or spousal support.
Everyone’s situation is highly unique. That’s why it’s crucial to have legal guidance as you update (or put in place) your estate plan as you divorce.