Planning a Divorce? Be Sure to Update Beneficiaries of Your Will, Estate Plan and Other Documents
Although estate planning will probably be the last thing on your mind after a divorce, you should certainly review your will and estate plan to make sure you have designated appropriate new beneficiaries, executors and trustees.
In Delaware, as in most states, your ex-spouse is automatically removed from the list of beneficiaries in your will when you divorce. If your spouse was named as executor of your estate in your will, he/she will automatically be removed from that obligation, too.
While it may be good news that your ex-spouse is out of your will automatically, it also means that you need to appoint a new executor of your estate. And, if you parted on good terms and you want your ex to be a beneficiary of your estate, you will need to add him/her back appropriately.
It is important to tend to these matters yourself rather than counting on the state, because laws are often revised and most states require an official court order of divorce to remove an ex-spouse from a will. In addition, if you die while you are seeking a divorce, your last will and estate plan will be valid and your soon-to-be-ex-spouse would end up getting assets you intended to pass along to other family members.
These automatic triggers do not apply to your estate plan. You may have designated your spouse as a trustee of one or more trusts in your estate plan, so you will need to update any trustee appointments in your plan. If you want your ex to retain these responsibilities, you should let your estate planning attorney know your wishes.
If you remarry after the court successfully issues a final judgement of divorce, there are three basic steps you should follow to ensure that your estate is handled on your terms when you die:
- Revoke your will and write a new one.
- Update the beneficiaries of financial assets (life insurance, for example). This is very important and often overlooked. You may have benefits through your employer which need to be updated, too.
- Declare new powers of attorney in case you become unable to make financial decisions for yourself.
As you can see, it is important to keep your estate planning attorney informed about all of the changes in your life. In the case of divorce, get the ball rolling early, so when the divorce decree is issued, you really can enjoy a fresh start.