When we make our wills we typically name our spouse as the person who should make our medical decisions and inherit our assets. A divorce means that you may need to revisit these documents and update them.
The four main documents to update
While there are many documents that may need to be updated after the dissolution of a marriage (or ending of a relationship), the most common four are your:
- Last will and testament (called a will). You may want to leave your assets to your children or create a trust for them, if they are teens or older. You may also need to name a new executor.
- Living trust. This asset may need to be divided if it is shared between you and your now or soon-to-be ex. While a divorce judgment will cancel any distribution or gifts that were to go to your spouse, you will want to use clear language as to who the trustee is and what your intentions are when you update trust documents.
- Power of attorney (POA). There are two types of POA; financial and health care (also called health care proxy) .You may no longer wish to have your ex be able to access your finances after the divorce. Likewise, you may not want your ex to be the one medical staff asks to make health care decisions on your behalf if you are incapacitated. It’s important to have your medical office and your attorney have the more current copy of your wishes.
- Beneficiary. Many accounts have a beneficiary designation (including bank, IRA, mutual finds, life insurance and 401(k), among others). You may wish to create payable on death (POD) or transfer on death (TOD) designations. Pension plans may be divided during divorce and the beneficiary may need to be updated. Division of pension plans is a separate issue. Most pensions require that the couple be married for at least 10 years in order for the non-pension earner to be eligible.
It is best to revoke and destroy old wills to avoid any confusion. If your parents are still alive they may wish to revise their estate plans or create a codicil after your divorce. Working with an attorney who works in both family law and estate planning can work to make this process more consistent;