Estate Issues To Consider During Divorce
According to Fairfax divorce attorney Lisa McDevitt, there are several changes an individual may wish to make to their estate plans when they divorce their spouse.
“One of the things you should check is if you need to rewrite your power of attorney,” says McDevitt. “Your divorce may not invalidate your will, but may invalidate your spouse as power of attorney.”
If a divorced couple on good terms wishes to keep each other as “attorney in fact,” it is advisable to check with the divorce attorney during proceeding and work with estate planning lawyer to ensure power of attorney is valid. If there is an Advanced Health Care Directive in place, the ex will be able to make medical decisions and, unless modified, it will remain in effect regardless of the patient’s marital status.
A newly divorced individual should also rewrite their last will and testament to reflect any changes, including removing the ex-spouse from inheriting the bulk of the estate. If there are retirement plans in place, the beneficiary of any retirement accounts, including IRAs and 401(k), should be updated. Check with the financial institutions where the retirement accounts are set up to update the beneficiary designation. Also, update any life insurance policies, including changing the beneficiary designation, and work with a financial advisor to see if policy amounts should be changed, depending on any minor children or other dependants. Are there other bank or brokerage accounts, annuities, or health savings accounts? Those also typically have beneficiaries and should be updated. If there is a joint account with a shared safety deposit box, the items therein need to collectively be sorted and allocated, and the lease on the box should be canceled.
Child custody is another issue to revisit – though the other spouse typically would get full custody in the event that something happens, there may also be trusts or other estate planning documents that need to name the guardian of minor or disabled children in the event of the spouse’s death.
There are numerous estate and legal issues to be decided when divorcing. Work with an experienced divorce attorney to find out what estate issues are affected by the divorce.