5 Estate Planning Updates You Can’t Ignore After Divorce

Divorce is never easy. It can be an emotional and stressful process that requires untangling two lives that have been intertwined for years. One important but often overlooked aspect of divorce is how it impacts your estate plan.

If you’re going through a divorce in Wilmington, North Carolina, here’s what you need to know about updating your estate planning documents.

Revoke Your Will and Create a New One

In North Carolina, a divorce automatically revokes any provisions in your will that pertain to your ex-spouse. This means that if you named your spouse as a beneficiary or executor in your will, those designations will no longer be valid after the divorce is finalized.

However, the rest of your will remains intact. If you want to change other provisions or beneficiary designations, you’ll need to create a new will that reflects your updated wishes. It’s best to do this as soon as possible after the divorce to ensure that your assets are distributed according to your desires.

When creating your new will, consider the following:

• Who do you want to inherit your assets? Make sure to clearly specify your beneficiaries and what each person will receive.
• Who do you want to serve as executor of your estate? This person will be responsible for managing the probate process and ensuring that your final wishes are carried out.
• Do you have minor children? If so, you’ll want to name a guardian for them in your will. This is especially important if your ex-spouse is not able or willing to take on this role.

Update Beneficiary Designations

Many assets, such as life insurance policies, retirement accounts, and bank accounts, allow you to name a beneficiary who will inherit the asset upon your death. These beneficiary designations supersede anything written in your will.

After a divorce, it’s crucial to review and update these designations. If your ex-spouse is still listed as the beneficiary on your 401(k) or life insurance policy, they could inherit those assets even if that’s not what you want.

Contact each financial institution and request a change of beneficiary form. You’ll need to fill out the form with your new beneficiaries and return it to the institution. Be sure to keep copies of the updated forms for your records.

Revise Your Power of Attorney

A power of attorney is a legal document that allows you to appoint someone else to act on your behalf if you become incapacitated. There are two main types:

1. Financial power of attorney: This person can manage your financial affairs, such as paying bills, filing taxes, and accessing bank accounts.
2. Healthcare power of attorney: Also known as an advance directive, this document allows you to appoint someone to make medical decisions for you if you’re unable to do so yourself.

If you had previously named your spouse as your power of attorney, you’ll want to update these documents after the divorce. Choose someone you trust implicitly to fill these important roles, such as a close family member or friend.

You should also consider creating a living will, which specifies your wishes for end-of-life medical care. This can include things like whether you want to be kept on life support or receive pain relief medication.

Reevaluate Your Trust

If you have a revocable living trust, you’ll need to update it after a divorce. Like with a will, any provisions related to your ex-spouse will become invalid. You’ll want to remove your ex-spouse as a trustee and beneficiary and replace them with new appointees.

If you have an irrevocable trust, making changes is more complicated. These trusts cannot be easily amended or revoked, so you’ll need to consult with an estate planning attorney to discuss your options.

Consider a Premarital Agreement

If you plan to remarry in the future, it’s wise to consider a premarital agreement, also known as a prenuptial agreement or “prenup.” This legally binding contract specifies how assets will be divided in the event of a divorce or death.

A prenup can help you protect your separate property, such as a business or inheritance, and ensure that your children from a previous marriage are provided for. It can also clarify financial expectations and responsibilities during the marriage.

While not the most romantic topic, discussing a prenup with your future spouse can lead to a healthier and more transparent relationship around money and finances.

Work With an Estate Planning Attorney

Navigating the legal complexities of divorce and estate planning can be overwhelming, especially during an already emotional time. That’s why it’s essential to work with an experienced estate planning attorney who understands North Carolina laws and can guide you through the process.

An attorney can help you:

• Understand how divorce impacts your existing estate plan
• Create a new will, power of attorney, and other necessary documents
• Update beneficiary designations on financial accounts
• Modify or revoke a trust
• Draft a premarital agreement
• Ensure that your estate plan is comprehensive and legally valid

Look for an attorney who focuses their practice on estate planning and has experience working with clients going through divorce. Don’t be afraid to ask questions, and make sure you fully understand all your options before making decisions.

The Bottom Line

Divorce is a major life change that requires updating many aspects of your financial and legal life – including your estate plan. By taking proactive steps to revise your will, beneficiary designations, power of attorney, and trusts, you can ensure that your wishes are carried out and your loved ones are protected.

If you’re going through a divorce in Wilmington, NC, don’t wait to update your estate plan. Contact a trusted estate planning attorney today to discuss your unique situation and create a plan that gives you peace of mind for the future.