In Part 1 of this series, I discussed the first two critical estate planning updates you must consider if you are getting divorced. Here, in Part 2, I will cover the last three of these must-do planning tasks.
Because getting divorced can be overwhelming on so many different levels, updating your estate plan often takes a back seat to other seemingly more-pressing priorities. But, failing to update your plan for divorce can have negative consequences, some of which you may have never even considered before.
Last week, I discussed the first two estate planning changes you must make – updating your power of attorney documents and beneficiary designations – and today I will share the remaining three.
3. Create a new will
In Florida, your will is automatically revoked by default after the divorce is final. However, you should not wait until the divorce is over before creating a new will, because once you file for divorce, you may not be able to change the provisions in your current will during the divorce proceedings.
As previously mentioned, Florida law considers you to be legally married until the judge signs the final judgment ending the marriage. This means if you die or become incapacitated while the divorce is still ongoing and you have not updated your estate plan, your soon-to-be-ex spouse could end up inheriting everything or take complete control of your legal, financial, and healthcare decisions.
As such, before filing for divorce is the best time to rethink how you want your assets divided upon your death. This most likely means naming new beneficiaries for any assets that you would have previously left to your future ex and his or her family. And unless it is your wish, you will probably no longer want your ex – or any of his or her family – listed as your will’s executor or administrator, either.
In light of this uncertain legal landscape, it is critical that you consult with me as soon as you know divorce is on the horizon. I can help you understand the law and how to best navigate it when creating your new will – whether you do so before or after your divorce is over.
4. Amend your existing trust or create a new one
If you have a revocable trust set up, you will want to review and update it, too. In addition to reconsidering what assets your soon-to-be-ex spouse should receive through the trust, you will probably want to replace him or her as a successor trustee (if they have been assigned that power).
Trusts provide a wide range of powers and benefits unavailable through a will, and they are particularly well-suited for blended families. Given the likelihood that both you and your spouse will eventually get remarried – and perhaps have more children with a new spouse – trusts are an invaluable way to protect and manage the assets you want your children to inherit.
By using a trust, for example, should you die or become incapacitated while your kids are minors, you can name someone of your choosing to serve as successor trustee to manage their money until they reach adulthood, making it impossible for your ex to meddle with their inheritance.
Beyond this key benefit, trusts afford you several other levels of enhanced protection and control not possible with a will. So, you should at least discuss creating a trust with me before ruling out the option entirely.
5. Revisit your plan once your divorce is final
During the divorce process, your main planning concern is limiting your soon-to-be ex’s control over your life and assets should you die or become incapacitated before the divorce is final.
Accordingly, the individuals to whom you grant power of attorney, name as trustee, designate to receive your retirement benefits, or add to your estate plan in any other way while the divorce is ongoing, are often just temporary.
Once the divorce is final and your marital property has been divided up, you should revisit all of your estate planning documents and update them accordingly based on your new asset profile and living situation. From there, your plan should continuously evolve along with your life circumstances, particularly following major life events, such as getting remarried, having additional children, and/or when close family members pass away.
Do Not Wait. Act Now!
Even though divorce can be one of life’s most difficult transitions, it is vital that you make the time to update your estate plan during this trying time. Meet with me as your Personal Family Lawyer® to review your plan immediately upon realizing that divorce is unavoidable.
Putting off updating your plan during a divorce can make it legally impossible to change certain parts of your plan, so take action now. And if you have yet to create any estate plan at all, an impending divorce is the perfect time to finally take care of this important life task. Contact me today to get the process underway with a Family Wealth Planning Session.