Your life changes fast and unfortunately not always for the better. Plans that you have made for the future must change, in these cases and your estate plan is no exception. While many want to think that estate planning is something that is once and done, it should never be treated as so. Estate planning is a process that doesn’t stop until you pass on. One of the biggest life events that a person can experience is divorce. Suddenly, plans made together no longer make sense and that is no more true than in estate planning.
Estate Planning and Divorce
Going through a divorce is a huge red flag in estate planning. This is due to the intimate nature of marriage. Most people designate their spouses for almost all pivotal roles in their life. From the executor of the estate to the beneficiary of retirement accounts, your spouse is almost always the individual designated to make critical decisions in your life as well as receive a large amount of your assets when you pass. These designations do not change automatically when your divorce is finalized. In fact, it might be prudent to change these designations and documents even before the divorce is finalized if the divorce is not amicable and the parties may be hostile to each other.
Review Everything You Have In Place
If you are going through a divorce, it is important to go back and take a look at everything you have that has your spouse’s name on it. This includes:
• Individual Retirement Accounts (IRAs)
• Life Insurance
• Retirement Plans
Transfer on Death (TOD) Investment Accounts
Payable on Death (POD) Bank Accounts
Last Will and Testament
Health Care Power of Attorneys and Living Wills
Powers of Attorney
A Potential Disaster
The fallout from the failure to update these documents and designations can be extremely detrimental to your self, your family and your future spouse. Imagine yourself in the future after having obtained a divorce. You get remarried and have a new family. Due to unforeseen circumstances, you pass away unexpectedly. Thankfully you have a large life insurance policy taken out on yourself to benefit your children. However, you never updated the beneficiary designation from your first spouse. Legally your ex-spouse is the one who is entitled those proceeds. There is no legal mechanism in place for your current family to collect on those proceeds as they contractually go only to the named beneficiary.
Steciuch Law Can Help
Reviewing your current accounts, documents and beneficiary designations is a necessity for any estate plan. Having an up to date estate plan will protect you and your family, and ensure that your wishes are reflected in legally binding documents.
For assistance in estate planning matters, contact Steciuch Law at (219) 476-3870. Steciuch Law offers flat fee services in estate planning matters.