The Village Law Firm | Recently Divorced? It's Time To Update Your Estate Plan
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  • Recently Divorced? It's Time To Update Your Estate Plan

    08/15/2022

    Your estate plan is a living document or set of legal documents. This means the plan you set today likely won’t be the plan you have five or ten years down the road. It’s important to take time to update your plan when important changes happen in your life, and divorce may be the most important example of this.

    Your divorce may be exhausting and the last thing you may want to do right now is speak with another attorney, but overlooking this step can result in your hard-earned assets ending up in the hands of your former spouse.

    Thankfully, your ex will automatically be removed from any of your estate planning documents such as wills, a power of attorney, and your healthcare proxy after a legal divorce. However, they may still have access to certain accounts or assets if you don’t take the necessary steps to mitigate this risk.

    Update account beneficiaries

    It’s likely you still have your former spouse listed as a beneficiary of certain accounts. This may include retirement accounts, life insurance policies, or other accounts that have a designated beneficiary of your choosing.

    These designations generally preempt beneficiary designations in a will, so updating your will will not prevent your ex from receiving those assets. You should access your account or contact the organization that holds your account to ensure your beneficiary information is updated to remove your ex.

    Assets passing through your children

    Another way your former spouse can access your assets is through the children you have together. There are two specific scenarios where this can happen:

    • When you designate assets to be transferred to your minor children.  Because minor children cannot legally manage the assets on their own, the other parent may be appointed by a court to manage these assets (a great example of why you should never name a child as your beneficiary)

    • If your adult children die without any children or heirs of their own, any money inherited by them would likely transfer into the hands of your former spouse.

    You should consider these scenarios when updating your plan to ensure your hard-earned assets end up in the right hands.

    Protecting Your Assets with a Trust

    A complete estate plan is the best way to protect your assets when you pass away. A revocable living trust is often the best option if there’s a former spouse waiting in the wings. A revocable living trust allows your assets to probate, which can prevent your former spouse from interfering with your wishes and the transfer of your assets. You can also set parameters for when and how assets are transferred, which allows assets to stay in the trust (to be managed by a trustee of your choice) until your children are old enough to manage them on their own. You can also designate what happens to your assets should your children die, preventing the assets from reverting to your former spouse.

    Work with an attorney

    Your estate plan is best protected with the help of an experienced estate planning attorney. The Village Law Firm team takes pride in bringing peace of mind to New Yorkers and their families. Contact our firm for a thorough review of your estate plan and to ensure your assets end up with the people - or causes - you want.

    For additional advice on this subject or to learn more about other important estate planning subjects, you can find informational videos on our YouTube page.

    CATEGORY: Estate Planning