Compliments of The Litherland, Kennedy & Associates, APC, Attorneys at Law
Written By: The American Academy of Estate Planning Attorneys
Consider all the planning a couple may do during the course of their lives: purchasing a home, building a business, starting a family – the list is endless. However, no one plans for a break-up. So what happens when there’s no longer a “happily ever after?” What will our finances, our emotions and even our future look like on the other side of divorce?
Not only must we rethink our immediate future, but there are also long-term plans that must be addressed. Specifically, our estate plans will need to be revised. The fact is, it’s difficult to look past the pain that’s felt in the moment, and looking towards the future may suddenly feel foreign. But taking a proactive step in reducing the risks and going through the process of making important changes can help us feel more in control. Not to mention, there are many benefits that come from knowing those legalities are addressed. Here are a few ways to move toward those goals during a divorce from an estate planning perspective.
One of the most important changes you’ll make moving forward is changing the beneficiary designation on your retirement plan. Don’t forget that you’ll need to change the beneficiary on your actual retirement account, as many assume the only place these changes should be reflected is on their estate planning documents. The beneficiary on the retirement account takes precedence over anything you might have changed in your other legal documents.
Your powers of attorney–financial and medical–should be revised as well. Even if the divorce was mutual, odds are, you’ll want to name someone else to make medical and financial decisions on your behalf, should you become incapacitated. Your life insurance policy should also be reviewed.
Just as you changed your other joint accounts, such as credit cards and bank accounts, any Trusts you established as a married couple will need to be amended.
You likely have a HIPAA authorization form in place, as well. These important documents are designed to protect your medical confidentiality while also preventing access to your information by others with no authorization, such as a former spouse. You’ll want to be sure these forms are also updated.
From a technological perspective, you should also change your PIN numbers associated with any of your financial accounts and change passwords to your online accounts. This is really sound advice regardless of the situation, but certainly if you’re going through a divorce.
Finally, remember that a bit of time spent with your estate planning attorney after a divorce can go a long way in shoring up the path towards retirement, whether you remarry or opt to remain single.
Divorce is overwhelming, frightening and sometimes exhausting. While those emotions will subside over time, it is both important and empowering to take control over aspects of the future you can make better in the meantime. A qualified estate planning attorney can help you reach those goals.