Divorce is one of life's most painful and life-altering events. The emotional and financial stress caused by the end of a marriage often means that estate planning is not on many people's minds – but it should be. Though frequently overlooked, estate planning is a critical part of the process.
Maybe not. Many people overestimate the effect of a divorce decree on their estate plan. It is a common mistake to believe that the decree automatically invalidates all of the estate planning documents and beneficiary designations of both former spouses. It is much more complicated than that. The effect of a divorce decree on your estate plan depends on both the type of estate planning document used and the state that you live in. The laws of each state vary dramatically and are often more limited than what you would assume. You need to take action to create a new plan after the end of your marriage.
Yes. You must take affirmative action to sign new powers of attorney and specifically revoke your old powers of attorney naming your ex-spouse as your agent. In your updated documents, you should expressly state that the new agent has the authority to determine who can visit if you become incapacitated. Additionally, you should contact all the people and institutions that have your old advance directives and powers of attorney on file to inform them of the changes.
In your new post-divorce will, you should name your choice as guardian for any minor children. Your designation is not binding on the court, but it will inform the judge of your preference. The court will always make custody decisions based on what it believes is in the children's best interest.
In addition to custody, you need to think about your minor children's inheritance – how you want it to be used and who you want to control the assets if you pass away. For this purpose, your estate plan should include a dependable person as trustee, under either a will or revocable trust, to control your children's inheritance until they reach an appropriate age, or the funds may be placed in an account controlled by your ex-spouse.