Following a divorce, you may need to make many changes in your life. Your income changes. Your residence may change. You may need to change your child custody arrangements.
Do you need to change your will and other estate planning documents, too?
In short: you should always review any binding legal documents following a divorce, since the way you want to deal with them may change substantially. Consider these documents that you may want to revisit.
Child Custody Arrangements
You may have plans for what happens to your children if you and your former spouse both die. Do those plans change now that you have divorced? Carefully consider how you want to manage any child custody arrangements. Keep in mind that you may need to work with your former spouse. Generally, the child’s other parent will get full custody if something happens to you; however, you may want to make arrangements that will allow visitation for grandparents, for example. You may also want to have another discussion with your former spouse about what you would like to happen to the children if both of you pass away. If either of you remarries, you may want to visit these documents again.
What happens to your possessions after your death? A joint will, put together before your divorce, may have assigned those assets to the individuals both you and your spouse wanted to include. Your will may also have clearly stated that your spouse would receive all property and all of your assets if you died first. You certainly want to revisit that document after your divorce, since you may have very different plans for your assets once you no longer need to take your former spouse into consideration. Even if you did not name your former spouse directly in the will, assuming that community property would continue to belong to them in the event of your death, you may want to reconsider who will receive your finances and other assets after your death. Did you name a beneficiary in your former spouse’s family? Do you want to change that information based on your divorce?
Carefully revisit your will after any major life events to ensure that it still reflects your wishes. Keep in mind that if you do not change your will, the executor of your estate may end up following the instructions laid out in your current will, even if it no longer reflects your circumstances or the individuals you wish to benefit in the event of your death.
Your Living Trust
Have you set assets up as a living trust to create an easier transition of ownership in the event of your death? You may have created a living trust intended to streamline settling your estate after your death. Ownership may transfer easily to your direct heirs. If you named your spouse on that living trust, you may want to remove them.
Handling an Inheritance for Minor Children
If you have minor children who will receive your assets in the case of your death, you may want to carefully consider how you want to set up their inheritance. Depending on how and when your children will take possession of those assets, if you die before your former spouse, he or she may end up with control of those assets until your children reach the age of adulthood. You may want to set up a trust for your children that will remain closed until they can manage it for themselves. Some parents do not allow minor children to take command of their inheritance until they reach 18, 21, or even 25, when they are more likely to make positive financial decisions.
Medical Power of Attorney and End-of-Life Instructions
A medical power of attorney designates who you want to make medical decisions for you if you cannot make them for yourself. Most married couples assume that their spouse will automatically have the right to make those decisions. However, if you set forth a medical power of attorney that specifically named your spouse, you may want to consider who you now want to make medical decisions on your behalf if you cannot make them for yourself. You may also want to consider who you currently have named as your medical power of attorney if you chose a family member or friend of your former spouse.
You may also want to consider any end-of-life directives you left behind in your legal instructions, particularly if your spouse influenced those decisions. For example, if your spouse preferred to take all possible measures to keep you alive, but you prefer that doctors not use extraordinary measures to prolong your life, you might want to change that directive after your divorce. Review those documents carefully to ensure that they reflect your current desires.
Your Life Insurance Policies
Most people, when they take out a life insurance policy, name their spouse as the primary beneficiary. If you die, your life insurance policy will pay out to the beneficiary named in your policy—even if you have since divorced your spouse. In addition to the other legal paperwork you may want to revisit following your divorce, you should carefully examine your life insurance policy, whether private or employer-sponsored. Who benefits in the event of your death? You may want to name your children rather than your spouse. If you fear that your spouse will mismanage those funds even if they go to your children, you may want to set them up to pay into a trust set aside for your children. You may also choose to name an outside beneficiary. On the other hand, you may want to name your spouse as the beneficiary even after your divorce if your spouse will continue to provide care for your minor children and will need those funds to ensure that your children have what they need. Consult your attorney to learn more about your legal options.
After a divorce, you have many considerations you must keep in mind, including the legal paperwork. If you need to revisit your estate planning needs, including your will, your medical power of attorney, and any other planning documents, Stephenson, Chavarri & Dawson, L.L.C., can help. Contact us today at 504-523-6496 to change your legal documents or to learn more about what changes you need to make following your divorce.