Securing Your Estate During A Divorce
Estate plan considerations when the marriage is in trouble. The majority of married couples will list each other as at least one of their beneficiaries for their accounts. However, not every married couple will live happily ever after. With separation and divorce rates on the rise, it is important for individuals to know what will happen to their Mesa estate plan in the event of a split, and what they should do to revise it.
Here are the 3 steps you should take to revise your will and other documents if you happen to get divorced.
1. Redo your will and trust.
The first thing you should do is review your existing will and/or trust to see whether they still reflect your wishes and make a brand new one. If you did not have a will and trust, now is a good time to take care of that. Your will and trust should include information
- Who and under what conditions or protection you will leave your property. If prepared your will or trust while you were married, chances are you left your property to your spouse. After the split, you may want to change that and leave everything to your children or some other relative or friend.
- Who will execute your final wishes of your estate. If you had named your spouse as your personal representative and/or trustee, you will need to name new fiduciary in your new documents. Pick someone who will act on your behalf and make decision based on your wishes.
- Who will be the guardian of your children if you pass away while they are still minors. Naming a guardian for young children is one of the most common reasons parents make wills. However, in the event of a split, the court may give your children to your ex-spouse by default and appoint your ex-spouse as your child’s conservator to handle any money you leave for your child outside of a trust.
2. Update your beneficiaries.
In the event of a separation or divorce, it is important to review who you named as your beneficiary on all retirement plans and insurance policies. Certain “qualified plans” such as your pension and 401k are governed under a law called the Employee Retirement Income Security Act, which says that the plan administrator must turn the funds over to the named beneficiary, regardless of marital status. This law takes precedence over laws that revoke your spouse as the beneficiary after a divorce, so it is important to make the change yourself if you do not wish for your ex to inherit all your funds.
3. Execute a new power of attorney.
The power of attorney gives a person the authority to act on your behalf if it should become necessary. Most people execute at least two powers of attorney: one for medical decisions and one for financial decisions. If you had given your ex-spouse or soon to be ex-spouse the authority to handle your affairs, now is the time to revoke that document and make a new one.
When you get married, you never dream that one day it will end in divorce. If you find yourself in this situation, you should contact your Arizona estate planning attorney, and revise your existing estate plan.
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