Estate Planning Documents to Review Before a Divorce

Many people neglect to update some or all of their estate planning documents when they divorce, while others move quickly to change beneficiaries and make other updates after a divorce. However, some estate planning changes are likely in order before a divorce, or while the divorce is in progress. This is especially important if the divorce is acrimonious and the spouses are not operating in one another’s best interests.

Your estate planning attorney is the best source of advice about whether some or all of your estate planning documents should be updated as soon as you decide to divorce. Here are some possible examples:

• Your will or living trust: Depending on the phrasing of your beneficiary designation, your will or living trust may or may not require updating to ensure that your former spouse doesn’t inherit. During the pendency of a divorce, however, you are still married, meaning he or she is still your spouse and will receive whatever was designated for your spouse—or, if you don’t have a will or living trust, whatever your spouse would receive under intestate succession. It may be in your best interests and the best interests of your intended beneficiaries to make changes before you divorce.
• Your power of attorney: It’s common to grant power of attorney to your spouse so that he or she can manage your affairs if you should become incapacitated. However, if you’re in the process of a divorce, you probably don’t want your estranged spouse to manage your money and other property while you’re unconscious or otherwise debilitated. If you have a document granting power of attorney to your spouse, you may want to replace it before a divorce.
• Your healthcare proxy: Like powers of attorney, healthcare proxies are most commonly granted to a person’s spouse. But, if you’re in a serious accident or fall ill and are unable to make your own medical decisions while your divorce case is pending, you may not want to leave that power in the hands of your soon-to-be-ex. Switching your healthcare proxy to an adult child, a sibling, or even a trusted friend before a divorce may improve your peace of mind.
• Your life insurance beneficiary: If you have minor children with your spouse and have faith that he or she will prioritize providing for the children, you may choose to leave your spouse listed as beneficiary on your life insurance policy. However, if you don’t have children or question your estranged spouse’s priorities, you may opt for another arrangement that ensures that the benefit of those insurance dollars reaches the person, people, or organization you most want to support.

Of course, not every aspect of your estate plan can be updated before a divorce. One significant example is your retirement account beneficiary. Your spouse may receive a portion of your retirement account in the divorce, and once the divorce is final you may choose to change your beneficiary. However, for most types of retirement accounts, you can’t remove your spouse as beneficiary while you’re still married unless he or she signs a waiver.

Also make sure that you take inventory after the divorce to make sure that titles to property such as real estate and motor vehicles accurately reflects current ownership. Similarly, you’ll want to ensure that your name has been removed from your spouse’s bank accounts, credit card accounts and other accounts, and that his or her name has been removed from yours.

The best time to open a discussion with your estate planning attorney about managing your estate plan throughout the divorce process is before a divorce petition is filed.