The decision to divorce will change the course of your life forever. While it’s important to focus on the here and now, you must also consider the effect a divorce can have on you, your children and your finances in the future.
Once you decide to divorce, take the time to find and review every detail of your estate plan. When doing so, here are five questions to answer:
- Who have you named as the guardian of your minor children? Post-divorce, you may want to change this. For example, if your ex-spouse’s parents are named as guardian, you may struggle with the idea of leaving this as is. You’ll want to work with your ex to find common ground, such as a mutual friend or couple. Keep in mind, this applies only in the event both of you pass while they are young.
- Who will make health care decisions on your behalf? Incapacity planning is a big part of a comprehensive estate plan. A serious illness, such as cancer or a stroke, could hinder your ability to make health care decisions. If your ex is currently named as your health care proxy, a change is probably in your best interest. Most people don’t want their ex in charge of making potentially life-changing medical decisions.
- Did you create a financial power of attorney during your marriage? If so, you’ll want to revoke the original power of attorney, as you don’t want to give your ex the power to make financial decisions on your behalf. Keep in mind that your spouse may have access to key financial records, such as bank account log-ins, so it’s also important to take additional steps to protect your privacy and enhance security.
- Should you update your will? It’s not always necessary, but you’ll probably want to make a change if your ex is in line to receive your assets upon your death.
- Did you create a prenuptial or postnuptial agreement? This type of agreement can affect many areas of your divorce, ranging from property and debt division to child custody. Subsequently, it can also affect your estate plan. So, if you created either type of agreement, review it with your attorney to decide on the next steps. It’s likely that your ex is doing the same.
There’s a lot to think about when facing divorce. Revising your estate plan may not immediately move to the top of your to-do list after making this big decision. However, you should add reviewing and altering your estate plan to your to-do list as a priority item.