If you’re working to get your divorce finalized before the beginning of next year when the new tax changes take effect, you’re probably consumed with that process. However, don’t forget that as a divorced person, you’ll likely need to make some significant changes to your estate plan — if you have one.
If you don’t, it will be more crucial than ever to establish one. A Gallup poll in 2016 found that more than half of Americans have no estate plan — not even a will. Without one, your estate will need to go through California probate court. This will be a time-consuming, costly, stressful process for your loved ones at what will already be a difficult time for them. Further, your assets will be distributed to your family based on state laws in a manner that may or may not be what you would prefer.
If you already have an estate plan in place, you’ll want to review it and likely update it. Following are a few things to consider:
Beneficiary changes
Likely you’ll no longer want your spouse listed as the primary beneficiary on your retirement and investment accounts.
Changes in assets
Divorce can leave people with fewer assets but sometimes with considerably more. Once you know what assets are now in your name, you’ll want to determine how you want those distributed after you pass away.
Guardianship of your children
Determine whether you’re still comfortable with whom you previously chose to be your children’s guardians if you and your spouse both died. If you chose your in-laws, you may no longer want that.
It’s wise to confer with your family law attorney as you go through your divorce on how you should address the guardianship issue in your estate plan, as it will likely depend in part on what kind of custody arrangement you and your co-parent have. Your family law attorney can also help you ensure as you work with your estate planning attorney that you don’t have any provisions in your estate plan that violate or contradict any of your divorce-related agreements.
