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Estate planning after divorce is one of the tasks you complete that brings you a little bit closer to the end of a difficult chapter and the beginning of a fresh start. This divorced woman is happily shopping at a farmers market.

Estate Planning After Your Divorce – The Importance of Getting Your New Estate Plan Done

The divorce process can be extremely time consuming, emotionally draining, painful and quite costly. Both parties are often frustrated or angry, and moving through a backlogged court system takes a long time. During your divorce and until it becomes final, every legal form you sign and each task you complete brings you a little closer to the end of a difficult chapter and the beginning of a fresh start. Revising your estate documents or creating new estate plans is one of those must-do tasks. Waiting too long to tackle estate planning after divorce may mean that your plan does not achieve your post-divorce goals.

Steps for Estate Planning After Divorce

Everyone’s estate planning process is unique, just as every divorcing couple is unique. How you approach estate planning after divorce depends on how closely your lives were intertwined, and the kind of relationship (if any) you plan to have going forward. Someone who’s going through a very amicable divorce and does not yet have a new partner might want to keep their ex-spouse as their health care proxy or power of attorney, for example. Whether you have children together, and whether they’re still minors, will also be relevant when creating a post-divorce estate plan. 

Your estate planning attorney will help you navigate the process, but these are some of the basic tasks that may be involved.

Execute a new will, or revise your existing will. Updating your will is one of the most urgent estate planning tasks after divorce. Assuming you executed or updated the will during your marriage, your former spouse is likely named as your personal representative/executor. Changing your will allows you to appoint someone else as your personal representative and clarify your wishes around who inherits and controls your assets. 

If you don’t already have a will, let divorce be the motivator that leads you to create one. State law will determine how your assets are distributed if you die without a valid will. If you’re not married, your money and belongings may go to family members to whom you’re not close. If you’d prefer that friends or charities inherit your assets instead, use your will to put those plans in place. You can always update your will again if your plans change.

Update your health care proxy and power of attorney. Your health care agent may someday be asked to make highly personal medical choices on your behalf. If you’re incapacitated and unable to consent to medical treatment or make decisions about end-of-life care, doctors will defer to your appointed health care agent. The person you name as your power of attorney has a similarly important role; they’ll be empowered to handle your financial matters if you’re unable to. 

Naturally, it’s important to feel that you can implicitly trust your healthcare agent and power of attorney to act in your best interest. Many people won’t feel comfortable with their ex-spouse filling this role after divorcing, even if the relationship is amicable. Further, in Massachusetts divorce automatically terminates your former spouses role as your health care agent and power of attorney. So, even if you want them to remain in such roles, you need to update your documents. If you don’t already have a designated health care agent or power of attorney the legal expense to get someone appointed can be costly. 

Update beneficiary designations.

Do you still want your spouse to inherit the money in your 401(k) or receive the payout from your life insurance policy? If not, update your beneficiary designations as part of estate planning after divorce. Retirement accounts with named beneficiaries don’t pass through probate, so changing your will won’t affect how these assets are transferred after your death. Each account must be updated with a new beneficiary. 

Deciding what to do about your life insurance beneficiary may require careful consideration when a couple shares minor children. Sometimes the divorce agreement requires that divorcing spouses keep each other as the beneficiary of one other’s life insurance policies. This is often done to cover alimony. The greater issue is what happens to any life insurance payouts, and how to control how that money is spent. If either person dies unexpectedly, the other spouse can choose to use the life insurance benefits to provide for the kids. (Maintaining life insurance may even be a requirement of a child support agreement, to guarantee a source of income for the custodial parent if the payer spouse dies.) It may be smarter to have your insurance policies in trust, as you may not want your ex-spouse to control money for your minor children.

Naming the children as beneficiary for a parent’s life insurance can create complications if the parent dies while the kids are still minors. Divorcing parents should carefully discuss life insurance beneficiary designations with their estate planning attorneys before making any changes. They should also consider adding trusts to their estate plan to allow a third party to control assets meant for their minor children. 

Consider additional protections for minor children. 

Sometimes after a difficult divorce, parents of minor children will use estate planning to create additional layers of protection for their kids. In some cases a parent will create and fund a trust in each child’s name, naming someone other than their ex-spouse as the trustee. This strategy keeps the other parent from being able to control any money that’s earmarked for the child. Even in the case of an amicable divorce, utilizing a trust can help to easily provide for your children post-death or post-divorce.

While custody arrangements can’t be altered using your estate plans, sometimes parents do use their estate plans to create a record of their wishes around guardianship of minor children. The surviving parent will often get full custody if one parent dies. If factors like violence or substance abuse contributed to the divorce, the custodial parent may want to use their estate plans to clearly state their preferences around an alternative guardian. 

Divorce may be messy and emotional, but updating your estate plans post-divorce doesn’t need to be. It can often be quite simple and even cathartic to create estate plans that are based entirely on your wishes for your future. Don’t worry if you don’t know exactly what steps you need to take or where to start. Your estate planning attorney can talk you through all the elements of your estate plan and review your divorce agreement to make sure your plans don’t interfere with any of your legal obligations. 

Sassoon Cymrot Law, LLC is here to help you navigate estate planning in a way that protects your assets, minimizes your future tax liability and allows you to feel prepared for the next chapter. Our estate planning attorneys bring experience and compassion to the process and are able to advise clients on a broad range of topics around estate planning after divorce. Contact us today!

Nicholas A. Iannuzzi, Jr. is a Partner at Sassoon Cymrot Law, where he concentrates his practice in Family Law. Attorney Iannuzzi has 27 years of experience handling Family Law matters including divorce, custody, paternity, child support, alimony, restraining orders, removal, modification and contempt actions.
Bridget grew up in Minnesota and has lived in Boston since 2015. In addition, she works with clients on estate planning and administration, as well as probate and estate administration.
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