Estate planning considerations after a divorce
The divorce is over, but some legal work remains to be done. The good news: Once you have revised your estate plan or created one for the first time, you should be able to rest easy until your next major life change.
There are a few considerations that divorced people need to keep in mind for their estate plans, whether the divorce was amicable or not.
Who is the beneficiary?
Your retirement plans, life insurance plans and other similar accounts where you name beneficiaries may designate your ex-spouse as the person getting the money. You probably want to change this, so go ahead and do it. If you wish to keep things the same, a quick meeting with your lawyer can let you know the best way to do it. Otherwise, when you die, your other heirs could claim that it was an oversight that you did not change beneficiaries.
Who is the children's guardian?
Ideally, both you and your ex-spouse would agree on who would take your children in if both of you were to die or become severely disabled. In most cases, if you were to die but not your ex-spouse, your ex would get full custody of the children. If you think they should not go to your ex, you can name a guardian and spell out your reasons. This does not mean the children go to the guardian, but a judge should consider your request seriously.
Who inherits your assets?
You can set up a living trust for your children to inherit the money from your retirement plans, bank accounts and life insurance policies via the trust. You can also set living trusts up so that your ex-spouse cannot take charge of the assets your children inherit.
Does the divorce affect other people?
Another consideration is whether the divorce might affect others' estate planning. For instance, do your parents still want to include your ex-spouse in their plans? Maybe, maybe not. If not, they should revisit their estate plans.