Divorce changes more than just your relationship status. It impacts your financial future and your control over your assets. If you recently divorced, updating your estate plan is essential. Failing to do so could leave your ex-spouse with control over your money or healthcare decisions. Take steps now to protect yourself.
Update your estate plan before the divorce is final
The best time to adjust your estate plan is while the divorce terms are still open for negotiation. Acting early gives you more options and helps you avoid legal roadblocks later. Use this checklist to get started:
- Update your will: remove your ex-spouse as a beneficiary or executor.
- Amend any trusts: Update those terms if you named your ex as a trustee or beneficiary.
- Change power of attorney: if your spouse controls your financial decisions, replace them with someone you trust.
- Update health care proxy: make sure your ex is not making medical decisions for you.
- Review prenuptial or postnuptial agreements: see how they impact your estate planning options.
- Check retirement accounts and life insurance: some accounts may be off-limits for changes until after the divorce is final.
- Negotiate life insurance terms: you may be able to use life insurance as a bargaining tool for child or spousal support.
Act early to give yourself more options. Once you finalize the divorce, you cannot make certain changes. For example, you cannot modify an irrevocable trust’s beneficiary designation after the divorce is over.
Revisit your plan after the divorce
After the divorce is final, review your estate plan again. Even if you made changes before, double-check everything to avoid future problems.
- Create a new will: most state laws treat an ex-spouse as if they died before you, but not all. A new will ensures your assets go to the right people.
- Update guardianship for minor children: if you die first, your ex will have custody. But if both of you die, make sure you have named a trusted guardian.
- Change beneficiary designations: bank accounts, life insurance policies, and retirement accounts pass directly to the named beneficiary.
- Replace power of attorney and health care proxy: some states automatically remove an ex-spouse from these roles, but not all. Take control and name someone you trust.
Protect your future
Divorce is hard enough without leaving your future at risk. Updating your estate plan ensures your assets and decisions stay under your control, not your ex’s. Take the time to protect yourself and your loved ones now, so you do not face costly surprises later. Consider consulting a lawyer during this process, as they can provide valuable guidance and ensure your changes align with state laws.
Protecting your future requires more than just signing divorce papers. A well-structured estate plan ensures your assets are distributed according to your wishes and that trusted individuals, not your former spouse, oversee your financial and healthcare decisions.