Divorce is often a time of uncertainty and personal upheaval. People are often uncertain about what may happen with their family relationships and personal resources. It is common for adults to focus so much on the immediate legal concerns that they face that they overlook other issues that could have a long-term impact on their lives and the people that they love.
For example, divorce typically means significant changes to someone’s family circumstances and financial responsibilities. What someone requires from an estate plan could shift suddenly when their marriage ends. Making certain estate planning moves early in the divorce process can protect an individual from vulnerable scenarios and help ensure they leave behind the legacy they intend after their death.
Removing a spouse from positions of authority
It is common for people to name their spouse in various estate planning documents. Someone might grant their spouse power of attorney so that they can access financial accounts held in only one spouse’s name. They might name their spouse as their healthcare agent or as one of the trustees with access to their property. Typically, it is crucial for those preparing for divorce to remove their spouses from positions of authority. Otherwise, the wrong person might make someone’s medical decisions when they become incapacitated and require the assistance of another party.
Removing a spouse as a beneficiary
It is quite common for people to leave a large portion of their personal resources to their spouse when they die. A spouse might be the main beneficiary protected in a will and may also be one of the beneficiaries of a trust. Those going through a divorce often remove their spouses as beneficiaries from testamentary documents. They may also need to revise paperwork filed with financial institutions and life insurance companies.
Reworking arrangements for children
While children are still minors, they cannot directly inherit from a parent’s estate. Those who divorce with underage children may need to address the financial vulnerability of their youngest family members. Specifically, parents who have divorced often choose to establish trust as a way of ensuring that their spouse won’t gain access to the inheritance they had for their children. They can protect assets for their children to use when they become adults.
Making appropriate estate planning adjustments can benefit those preparing for divorce or rebuilding after one. Those who address estate planning matters early in divorce may feel more peace of mind about their personal protection and their legacies as a result.