Divorce proceedings do not address everything.
Divorce is hard.
Anytime a relationship is broken, things get messy.
Unfortunately, without proper planning, your family may have more messes on their hands.
Money messes.
According to a Forbes article, titled “The First Thing You Must Do When Your Divorce Is Final,” everything in your estate plan should be revisited and probably changed.
What documents might these include?
- Trusts
- Powers of Attorney (property, healthcare, HIPAA, etc.)
- Your will
- Life insurance policies
- Retirement accounts
Why is updating beneficiary designation important?
If your ex is named as the beneficiary when you die, he or she will get the payout.
Your kids or new spouse get nothing.
What if your will states otherwise?
You ex still gets the insurance benefits.
What happens if you never made a will?
Not having a will is normally not a smart move.
Period.
On the other hand, dying "intestate" (without a will) leaves your ex with nothing under state law—unless you forgot to change beneficiary designations.
There is a catch.
Your divorce may require your ex to be named as an insurance beneficiary.
If so, you cannot act against it.
The terms of your divorce are binding.
Still, chances are some of your estate planning documents will need to be updated.
Do not delay.
After all, do you really want your ex listed as #1 on your "pull the plug" directive?
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
Reference: Forbes (August 14, 2016) “The First Thing You Must Do When Your Divorce Is Final”