Many people created their estate plans while they are married. Their wills, trusts, powers of attorney and healthcare directives may name a spouse as a primary beneficiary, executor, trustee or decision-maker. After a divorce, those designations may no longer reflect the individual’s wishes.
Divorce affects far more than a person’s marital status. It can reshape finances, family relationships and long-term goals. One task that is often overlooked during this transition is updating an estate plan. Unfortunately, failing to review estate planning documents after a divorce can lead to unintended consequences and unnecessary complications for loved ones.
Primary concerns
A will is often the first document that should be reviewed in the wake of a decision to divorce. Even in states where divorce automatically revokes certain provisions benefiting a former spouse, relying on default legal rules is rarely the best approach. Updating a will allows a person to clearly identify who should inherit assets and who should manage their estate.
Trusts should also be examined carefully. Depending on the type of trust at issue and its terms, a former spouse may still have rights or responsibilities that require modification. Trust amendments or restatements may be necessary to align the document with one’s current goals.
Beneficiary designations may also need to be addressed. Retirement accounts, life insurance policies and payable-on-death financial accounts often pass directly to named beneficiaries, regardless of what a will says. Many people are surprised to learn that an outdated beneficiary designation can sometimes override other estate planning documents.
Powers of attorney and healthcare directives deserve attention as well. If a former spouse is named to make financial or medical decisions during incapacity, that arrangement may no longer be desirable. New documents can appoint trusted family members, friends or other individuals to serve in those roles.
Parents of minor children may also want to revisit guardianship provisions and trust arrangements designed to benefit their children. A divorce often changes financial circumstances and may require adjustments to existing plans.
Estate planning is not a one-time event. Major life changes such as marriage, divorce, births and deaths should trigger a review of existing documents. What made sense years ago may no longer reflect a person’s priorities or family structure, and that’s okay.
