Composing your estate plans might have been a difficult enough process, but with a divorce on the horizon, you now have to consider making major changes to those plans. Altering your estate plans to accommodate your divorce is not a task you want to fall through the cracks. Conversely, you do not want to rush into major changes, either.
You have solid reasons to want to change your estate plans. If you left your spouse in your will, he or she will inherit from you even after your divorce. Likewise, failing to remove your spouse from power of attorney documents means your ex could have control over your financial or health care decisions. Forbes explains some basic tips to proceed with estate plan changes in divorce.
Estate documents you should change
In addition to listing your spouse as a will beneficiary, you may have named your spouse as the executor of your will. If you do not want your former spouse in charge of your estate after you die, consider changing the executor to someone else. Likewise, if your spouse has any involvement with your revocable trust, look into removing your spouse as trustee or from any role that gives your spouse control over your trust assets. Be sure to remove your spouse from power of attorney and health care proxy documents as well.
Find out what you cannot change
While you will likely have to make changes to your will and power of attorney documents, you might get in trouble if you change everything at the start of your divorce, such as your retirement account and your pension. A divorce filing can involve a restraining order on your assets, which includes keeping you from changing your beneficiary designations.
As a result, you cannot take your spouse off a retirement account or a 401(k) without inviting a penalty from a divorce judge. You will have to wait until the divorce is complete to know what you can and cannot change. You might consult with legal counsel to figure out what estate documents you should leave alone to prevent legal problems.
Revisit your plans after your divorce
You may not know everything that you need to change until your divorce is complete, so you should revisit your estate plans following the divorce. By this time, you may have clearance to change beneficiary designations. This will be a good time to make those changes. If you forget to do so, your former spouse may claim the right to inherit from your pension or insurance policy after your death, which could spark a court fight between your children and your ex.