Even if your divorce is amicable, you still need to make changes to the paperwork, including your will and power of attorney. Yahoo News’ recent article entitled, “I'm Divorcing. Will That Impact My Estate Planning?” says to ask an experienced estate planning attorney how to protect your assets against potential loss due to a potential divorce. Here are some tips:
Revise Your Will. If you have a will, and if it’s written so that your soon-to-be ex will get all or most of your assets, you may want to change how to split up your assets after your death. Check with an estate planning attorney because state laws handle the assets in a will differently. Many states say that gifts to your ex are automatically revoked.
Change Your Trust. If you have a trust in your estate plan, your spouse may be designated as the trustee, so change who will be dispersing your assets.
Review Your Insurance Policies. You’ll want to remove your spouse from all of your insurance policies. However, if you have young children your ex-spouse will be raising, you may want to keep your ex-spouse as a beneficiary. If you were covered on your spouse's health insurance plan while married, you’ll need to get your own policy. Also consider changing the beneficiaries on your life insurance policy if you're worried about your future ex-spouse cashing in if something happens to you.
Change Your Power of Attorney. If your spouse is named as your medical or financial power of attorney, change that. Do that by the following steps:
- Notify the person currently holding power of attorney
- Make the change in writing
- Include all required language
- Notarize and, if necessary, record; and
- Notify all concerned parties.
Talk to an experienced estate planning attorney to make sure this is done correctly.
Divide Retirement Accounts. There are several factors to consider as retirements are divided, like the type of account and when the earnings were received. Before defined contribution plans can be split, the court must issue a qualified domestic relations order (QDRO). The court will determine which properties are marital and which are separate. When the judge signs the QDRO, it lets plan administrators enforce it. The order applies to all plans governed under the Employee Retirement Income Security Act (ERISA) of 1974, like 401(k) plans, 403(b) plans, and Thrift Savings Plan (TSP).
Reference: Yahoo News (Feb. 3, 2023) “I'm Divorcing. Will That Impact My Estate Planning?”
