You have a lot of different issues to worry about when you're facing divorce. If you have children, you're likely worried about ensuring a fair and positive custody agreement. It's also likely that both you and your former spouse have concerns about the process of dividing your assets, from your house to your retirement fund. Many people become so focused on the process of securing a divorce that they overlook some very important concerns during and after divorce court.
Your last will, estate plan and trust documents will all require updating in the wake of filing for a divorce. If your family is like most, you likely named your spouse as beneficiary, trustee, executor or even your sole heir. The intention was probably to avoid estate tax and probate. After a divorce, failing to update your last wishes could mean undermining your planned legacy and potentially dragging your estate and heirs through a protracted probate process.
Look at your last will and life insurance plan first
The first steps you should take includes removing your former spouse as an heir in your last will. You may also need to revisit your plans for your children in the event of your death. You may want to name a guardian. For other people who haven't done so already, a divorce may be an ideal time to consider creating a trust to protect assets for the children if you die.
Some people even choose to partially fund that trust with the future benefits of a life insurance policy. Most people name their spouse as sole beneficiary or name both their spouse and their children on their life insurance policy.
You also need to update your living will
Living wills offer peace of mind for the people who create them, as well as for their families and loved ones. These legal documents can help ensure that everything in your life receives proper care if you become unable to manage things yourself. Mental incapacity or coma are two common situations in which a person remains alive but can no longer make financial and medical decisions.
Living wills often include medical directives outlining preferences for issues like organ donation and life support. They may also include power of attorney documents assigning medical and financial power of attorney to one or more people. Make sure someone you trust is named on those documents, not your former spouse.
Don't forget any trusts you have created for your estate
If you have a trust for your children or a charitable trust that will arrange support for a non-profit you love, you may want to review whom you named as trustee. Even if there are several trustees for your trust, removing your former spouse may be a good idea. Alternatively, you could also leave your ex as trustee but add another trusted friend or family member to share responsibilities.
Divorce is about separating your life from that of your spouse. The process should also include updating your legacy for when you pass on to ensure it reflects your current situation.