Estate planning is often far from the minds of most people going through a divorce. However, the reality is that adjusting estate plans can be an important step to securing one’s financial future as a newly single individual. Following a change in marital status, it is wise for Texas divorcees to update powers of attorney, beneficiaries, life insurance policies, and so on. Here are some steps to take to keep estate plans up to date following a divorce:
- Review beneficiaries: Many people have set up their wills so that the surviving spouse receives all assets when their partner dies. This desire often changes with a divorce, making it important to change beneficiary designations both in a will and on any accounts. While there are often laws in place to protect from assets accidentally being passed on to an ex, it is much less time-consuming for the family when estate planning documents clearly state the correct person from the outset.
- Change powers of attorney: A power of attorney is an individual who has the ability to make financial or health decisions should the designee become incapacitated. Often, a spouse is named in this role; so, understandably, it is something that may need to be revisited following divorce. This involves not only to picking a new person or people for these roles, but also updating the necessary documents and informing the selected individuals of the change so they can accept the potential responsibility.
- Updating retirement accounts: As part of property division, retirement accounts will often be split between parties. Defined contribution plans can be only split following the issuing of a qualified domestic relations order (QDRO) in divorce court. It is important to handle matters related to retirement accounts quickly once such documents have been obtained, to ensure compliance with the court order and prevent conflict down the line.
Even in the most amicable divorce, a change in marital status can impact Texas estate plans greatly. For this reason, divorce is one of the major life events where it is particularly wise to take another look at estate planning documents and revise plans as needed. An estate planning attorney can be a helpful resource during this process.