Your divorce has now been finalized, and you’re likely exhausted and ready to move on. Part of starting a new chapter in life means making sure your affairs are in order and plans are set the way you want them. Let’s be honest: some of these matters are not fun to think about (for example, deciding who should inherit your assets after you die, or deciding who should make decisions for you if you become incapacitated), but they can prevent unfortunate situations if properly handled ahead of time. We’ve prepared a handy estate planning checklist to help you take wise legal and financial steps after your divorce.
It makes sense to create a new will after your divorce is finalized, even if preparatory changes had been made. Here are some items your post-divorce will may cover:
- Leaving property to individuals or organizations of your choice
- Setting up (or reestablishing) a children’s trust so that assets can fund a trust for any minor children you may have
- Selecting a guardian to take care of your children should something happen to you
- Naming an executor to handle estate matters
Advance Directives (Powers of Attorney)
If you haven’t already chosen a trusted person (or persons) to make financial and medical decisions on your behalf should you become incapable, now’s a good time to do so. You’ll want to name both a financial durable power of attorney and a medical durable power of attorney (although it could be the same person for both). This tends to be a parent, sibling, trusted family member, or friend.
Most of the time people have their spouses designated as life insurance beneficiary, and it’s important to make any necessary changes as soon as possible unless the court order states otherwise. Many people name a children’s trust, close family or friends, or even beloved charities. One thing to remember: it’s a good idea to name an alternate beneficiary in case the primary beneficiary predeceases you. Not a happy scenario to envision, but it makes sense to plan for the unexpected.
Now that your divorce is final, you can make changes to your retirement account beneficiary designations, unless your final divorce decree states otherwise. Many of us hold multiple retirement accounts—from traditional IRAs to Roths to 401ks & 403bs—so it’s important to make sure you change all of them. You can freely remove your ex-spouse after the divorce (unless the court says otherwise), and designate your children, charities, or other individuals. Make sure you engage a trusted estate planning attorney for these matters. They should be able to help you maximize the benefits (e.g. income tax deferment options) for those you care about most.
Make sure any important items like cars or homes are titled appropriately after your divorce. A title simply indicates the rightful owner of an asset.
We’ve heard of some unfortunate scenarios where people fail to take care of estate planning matters after a divorce. Money or assets get left in unwanted hands, often with devastating consequences to loved ones and even children. Don’t let this happen to you and your family.
At BB&C, we pride ourselves on being by our clients’ sides for the long haul, in good times and in bad. We’re here to help you navigate estate planning and family law matters like these—don’t hesitate to talk to us at 765.742.9066.
Missed our first two posts in this estate planning series? Read them here:
The content of this blog is intended to be general and informational in nature. It is advertising material and is not intended to be, nor is it, legal advice to or for any particular person, case, or circumstance. Each situation is different, and you should consult an attorney if you have any questions about your situation.