If you’re facing a divorce, estate planning may be the last thing on your mind.
While it can feel overwhelming to add one more item to your “to-do” list, now is an essential time to think about your estate planning, and what changes you’ll need to make in the future.
After all, estate planning has a massive impact on your future, and neglecting it now could cause significant problems down the road. If you’re facing a contentious divorce, neglecting your estate planning could also place you, your accounts, and your assets at risk, and make you vulnerable to the whims of your ex-spouse.
In this post, we’ll discuss the top changes you need to make to your estate planning documents both during and after a divorce, and how hiring a Pensacola attorney can help you navigate them.
Let’s dive in.
7 Estate Planning Tasks to Do Right Now
Regardless of whether your divorce is amicable or contentious, these estate planning to-dos will help you protect your assets and your future:
1. Update your health care proxy
Say you’re in an accident tomorrow and you wind up in the ICU. You’re severely hurt and unable to make your own health care decisions. Who steps in on your behalf? Unless you’ve updated your health care proxy (which likely names your spouse as your chosen decision-maker), the answer may not be what you’d like.
With that in mind, update your health care proxy to name a new medical decision-maker. While you may choose to leave your spouse as the named party, many divorcing couples update their documents to name adult children, parents, or friends, instead.
2. Update your will
New scenario: say you died because of your accident. Would you want your spouse in charge of your estate, or named as the person to inherit your grandmother’s art collection? If not, now is the time to update your will.
Remove your ex-spouse as your executor and take another look at the preferences you’ve established for guardianship of minor children or distribution of assets. A skilled lawyer can help you update your will and make sure your best interests are protected at each turn.
3. Name a new power of attorney
At some point during your marriage, you and your spouse likely completed power of attorney documents. These documents give each of you the power to sign for the other on legal documents. If you’re facing a divorce, though, it’s time to update your power of attorney.
The reason for this is simple: a durable power of attorney will give your spouse access to all of your accounts, including assets that are held solely in your name. If the divorce is not amicable, this is a cause for major concern. To protect your assets, revoke this power of attorney and establish a new one. You’ll need an attorney’s help to complete this process.
4. Revisit your inheritance preferences
Some divorcing couples choose to disinherit their spouse entirely. That can be tricky from a legal perspective, though, since some states make it impossible to disinherit your spouse completely. Instead, most clients choose to leave their spouse only what is required under the laws of their state.
Still other couples take a more charitable view and leave their spouse assets or possessions. While the choice is yours, it’s always wise to consult with an attorney to determine what you’re comfortable leaving your spouse, and how to communicate that in your will and other legal documents.
5. Review your prenuptial agreement
In light of your divorce, you should sit down with your attorney to revisit your prenuptial agreement, if you have one. This document will outline what you and your spouse are both legally entitled to during the divorce, and in the event of either of your deaths. As you establish your new estate plan, you’ll need to ensure that it is consistent with the terms of your prenuptial agreement.
6. Update your trust documents
Divorce is an excellent time to amend your trust documents. Again, the key consideration here is what assets you’ll leave to your spouse in the trust. The trust may also make financial provisions for young children.
If so, you can take this opportunity to update your preferences regarding whether your spouse accesses or manages funds meant for minor children. If you’d like to avoid your spouse’s involvement, you can name someone else as a trustee. Again, work with a Pensacola attorney to make sure you’re checking all of the important boxes here.
7. Revisit your estate plan once the divorce is final
Once you and your ex-spouse have finalized your divorce, sit down with your attorney to take another look at your estate plan. This is an excellent opportunity to identify elements that may need to be updated in light of the divorce, and to double-check things like beneficiary designations and other named positions.
Remember that every divorce is different, and it’s critical to work with a team of people, including an attorney, a CPA, and a financial advisor to ensure you protect your assets at each step of the process.
MGM Law Will Help Protect Your Future
The decisions you make during your divorce can have a major impact on the future of your life. While it can be overwhelming to think about things like life insurance and POA designation now, these are critical considerations that can help you avoid added stress down the road.
Here at MGM Law, our team of Pensacola divorce lawyers works with clients like you to comb through a variety of financial and legal considerations, and protect your assets during a divorce.
Don’t navigate your divorce on your own and face avoidable regrets later. Let our team help you navigate the divorce process and come out on the other side as quickly and painlessly as possible. Contact us today to learn more or to schedule your consultation.