Understanding the Impact of Divorce on Your Estate Plan
Jan. 24, 2013
Divorce is a tough situation to go through. This is a time in your life when you need to reconsider what might happen if you were ever incapacitated or passed away, and establish a comprehensive estate plan that will carry out your wishes and will name those you trust to make decisions for you.
A few things to consider about how a divorce might affect your existing estate plan:
If you already have a Will, your ex-spouse will be treated as having predeceased you. In other words, your ex-spouse would no longer be the personal representative (executor) under your Will even if he or she is named as such, and would not be a beneficiary of your estate, even if the Will said otherwise. You should carefully consider whether you should name different or additional personal representatives and beneficiaries.
Your divorce decree may require that you include certain provisions in your Will, or that you have insurance policies with specific beneficiary provisions. Also, keep in mind that a subsequent marriage revokes your existing Will unless your contrary intent is clearly indicated.
In addition, there are a number of documents you may have in place that give your ex-spouse certain authority or rights with regard to your finances or health care that you may now wish to change. These may include a Power of Attorney, HIPAA Release, or Oregon Advance Directive.
If you have children, attending to their needs is a top priority. If your children are young or have special needs or should not be given a substantial sum of money for some reason, you will probably want to include carefully worded trust language for them in your Will or Trust, and will want to carefully choose the trustee and the successor trustee who would administer those trust funds. Your ex-spouse may or may not be the best choice to handle such trustee duties. You should also indicate in your documents who you would want to be the guardian of your children if you were not able to care for them. The guardian is the person who would be appointed by a court to make decisions about your children's health care and where they live, and to make sure that their non-financial needs are being met.
The estate planning considerations mentioned above are not meant to be a complete list. If these considerations, together with all of the other considerations mentioned in this guide, are a bit overwhelming, the good news is that you do not have to handle all of these changes alone. There are professionals who are trained to help you and guide you through these important tasks. A competent estate planning attorney, for example, can sit down with you and help you decide whether you should have a Will or Trust, who should be in charge of the children if something happened to you, and which of your estate planning documents should be updated given your wishes and given the existing law at the time. While attorneys are not cheap, their advice can be invaluable, and they can help you create an appropriate estate plan that will give you peace of mind and will help meet your wishes no matter what the future holds.