The Intersection of Estate Planning and Divorce Issues
You have waited months, maybe a couple years, but you have finally received your signed divorce decree. Everything you need to legally disentangle yourself from your ex-spouse has been accomplished in your decree. Not so fast! There may still be multiple steps you need to take from an estate planning perspective that are not addressed anywhere in your decree. Failing to take these further steps can lead to various unintended consequences. The following are some of the most common estate planning items requiring follow-up after your decree is entered.
- Wills and Powers of Attorney: It is very likely you no longer intend that your ex-spouse remain a beneficiary in your will or your power of attorney on any matters. Therefore, you should visit with an estate planning attorney about drafting a new will and powers of attorney. You may have other beneficiaries in your will that remain, such as children, family and friends, but not your ex-spouse. Meanwhile, you will want to select a trusted person, maybe new spouse or close family member(s), to be your power of attorney for health and financial matters should you become incapacitated. Life can be very unpredictable – do not put off such important changes to these documents after your divorce is completed.
- Beneficiaries on Financial Accounts: From checking and savings to brokerage accounts, likely all these accounts you owned during the marriage have either a beneficiary or POD (paid on death) designee associated with them. This named individual is likely your ex-spouse, and it now needs to be changed if you no longer want these accounts to pass to them upon death. Again, these changes do not happen automatically, nor do they necessarily occur by changing your will. Instead, you should manually change all beneficiary designations associated with your financial accounts to reflect your new wishes.
- Life and Health Insurance: You must notify any life and health insurance policies you own that you are now divorced. For health insurance, in Nebraska you or your spouse can remain on the other’s health insurance for up to 6 months after entry of the decree, although not all Nebraska employers abide by this statute. If you are covered on your ex-spouse’s plan you or your attorney should confirm whether insurance will continue six months after your proceeding. Meanwhile, all whole and term-life insurance policies should be updated with a new beneficiary designation as well. Any whole life policies usually have a cash value associated with them and may have already been divided in your property settlement. If not, however, then the beneficiaries on these policies will need to be updated.
You have waited months and finally received your signed decree. Still, you may need to take these and other estate planning actions to legally disentangle yourself from your ex-spouse. For further assistance and advice with this and other issues in your case, please contact Scott V. Hahn at Slowiaczek Albers & Whelan PC, LLO to schedule your initial consultation.