The high divorce rate in California and beyond has some interesting ramifications for estate planning lawyers. While your will, trust, and medical directives may not be the first things that come to mind during the often heart-wrenching process of divorce, they are something that truly needs to be considered.
‘Til Death Do Us Part
You undoubtedly meant this vow seriously when you made it, but we all know that circumstances change. Unfortunately, if you don’t make it happen, your will and other estate planning documents do not change right along. It may seem obvious that you would not want your ex-spouse to be the executor of your will or to handle the dispersal of your assets, but if that’s what your will directs, then that is exactly what must legally happen.
Even if you haven’t been married for years, if your will, healthcare directives, power of attorney, etc. still list your ex in an authority position, then he or she is still designated to take on that role. This can become quite tricky in situations where the divorce was not amicable.
Another problem can arise if the ex-spouse remarries. If you haven’t updated your estate planning documents after the divorce, then it’s likely that your former spouse, rather than your children, will still be the main beneficiary. If he or she has remarried and then passes away, your assets can then pass to the new spouse and his or her children! This is not a scenario that many parents want to consider, but it definitely happens.
The Big Four
Even as the ink is drying on the divorce decree, it is in your best interest to update at least these four estate planning documents:
- Last Will and Testament – Again, you likely don’t want your ex-spouse to be in charge of your affairs upon your death. It is a good idea to name a new executor and rethink who your beneficiaries should be. If you have any trusts set up, it is time to amend them, as well.
- Powers of Attorney – These types of legal documents determine who will be in charge of things such as your finances should you become unable to take care of them yourself. Many people would shudder at the very idea of their exes having control over paying their bills, meeting their living expenses, etc. The power of attorney gives the named party significant financial power, and it is generally wise to revoke that as soon as possible.
- Healthcare Directives – Your healthcare directives name the party who you have designated to make medical decisions on your behalf if you are not able to do so yourself. Your ex-spouse would be responsible for making life-or-death decisions for you. If you have a living will, the spouse may also be named in that, so be sure to update it, too.
- Beneficiary Designations – Most insurance policies, bank accounts, etc. include the designation of a beneficiary. This is the person who receives all or some of the money from that policy or account upon your death. It is easy to forget about these things, but if you don’t update them after the divorce, your money will legally belong to your ex-spouse.
If you live in Orange County then you will want to work with a local estate planning lawyer upon your divorce to ensure that you are getting your affairs set up to match your new life. Give our office a call and ask if you qualify for a free Family Wealth Planning Session with the mention of this article to ensure your documents are properly amended and your post-divorce ducks are in a row.