The essence of maintaining an up-to-date estate plan cannot be overstated. This holds particularly true after a significant life event, such as divorce.
While updating your estate plan might not be the first thing on your mind during such a challenging time, it can be a critical step to ascertain that your wishes will be respected and that your assets will be distributed according to your current preferences.
Changing beneficiary designations
Divorce inspires significant changes, including many that can affect your relationships and financial circumstances. One concern that demands immediate attention involves update of beneficiary designations on your accounts and policies. Failure to scrub off your ex-spouse as a beneficiary could result in unintended consequences, with your assets potentially going to the wrong person.
Remember to remove your ex as a beneficiary from life insurance policies, retirement accounts and any other accounts where a beneficiary is designated. This can help to protect your loved ones from unnecessary legal battles.
Protecting your children’s future
Your estate plan can play a critical role in providing for your children’s future. Failing to update your plan after divorce might mean that your ex-spouse retains control over assets meant for your children. This can potentially jeopardize their financial well-being.
Consider establishing trusts for your children and designating a guardian who will have legal responsibility for them in case of your untimely demise. Updating your estate plan allows you to customize provisions that align with your desires for your children’s upbringing, education and financial security.
Updating your estate plan after divorce is not merely a recommendation; it is a critical step in helping safeguard your financial legacy and ensure that your wishes are honored. If you don’t know where to begin, feel free to seek legal guidance to help ensure that no stones are left unturned.