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How to Update Your Estate Plan When You Get Divorced

Estate Plan

Update estate plan divorce

Divorce is a significant life event that has emotional, financial and practical repercussions for everyone involved. Like many people, you may easily overlook the need to update your estate plan following a divorce which can lead to unintended consequences. To ensure that your estate plan accurately reflects your new circumstances and wishes, it is essential to make specific updates after a divorce. With that in mind, the Indianapolis attorneys at Frank & Kraft explain how to update your estate plan when you get divorced.

Steps to Take to Update Your Estate Plan After a Divorce

For most people, divorce is a life-changing event, and those changes need to be reflected in your estate plan to ensure that your plan works as intended. Common steps that you may need to take to update your estate plan following a divorce include:

  1. Revoke and Replace Your Last Will and Testament or Trust Agreement. If your ex-spouse is named as a primary beneficiary, Executor, or Trustee in your Will or trust, you will likely want to change these designations. In many states, a divorce automatically revokes provisions in a Will that pertain to an ex-spouse; however, it is still wise to create a new Will that clearly reflects your current intentions. You should also review and update any guardianship designations for minor children if applicable.
  2. Update Beneficiary Designations. Certain assets, such as life insurance policies, retirement accounts (like IRAs and 401(k)s), and payable-on-death (POD) bank accounts, pass directly to the named beneficiary regardless of what your Will states. After a divorce, it is crucial to update these beneficiary designations to remove your ex-spouse if that is your intent. Failing to do so could result in your ex-spouse inheriting these assets, even if you have a new Will in place. Instead, you may choose to name a new beneficiary, such as your children or another family member. Note: The terms of your divorce may require you to continue to carry life insurance naming your former spouse as the beneficiary.
  3. Revisit Trusts. If you have established a trust as part of your estate plan, you will need to review and potentially update it after your divorce. This includes changing the Trustee, beneficiaries, and any specific instructions that may involve your ex-spouse. If your ex-spouse is a Co-Trustee or has significant control over the trust assets, you may want to appoint a new Trustee. In some cases, you may need to dissolve the existing trust and create a new one that better suits your post-divorce circumstances.
  4. Consider Updating Your Power of Attorney and Living Will. Your Power of Attorney (POA) and Living Will are critical components of your estate plan that determine who will make decisions on your behalf if you become incapacitated. If your ex-spouse is named as your POA or healthcare agent, you will likely want to appoint someone else. This change is particularly important because the person you name in these documents will have significant authority over financial and medical decisions.
  5. Review and Amend Your Property Agreements. Divorce often involves dividing marital property, which can impact your estate plan. After the divorce, you will need to update your estate plan to reflect any changes in property ownership. For example, if you and your ex-spouse owned a home together, you might need to amend the title or ownership documents to ensure they accurately reflect your new situation.
  6. Take Stock of Your Assets and Liabilities. Divorce can significantly alter your financial landscape, making it important to reassess your assets and liabilities. You may need to update your asset inventory, which is a list of everything you own and owe. This step is crucial to ensuring that your estate plan accurately reflects your current financial situation and that your assets are distributed according to your wishes.
  7. Seek Professional Guidance. Updating your estate plan after a divorce can be complex, especially if you have significant assets, minor children, or a blended family. It is advisable to consult with an experienced estate planning attorney who can guide you through the process and ensure that all necessary changes are made properly.

Can We Help You Update Your Estate Plan Following a Divorce?

For more information, please join us for an upcoming FREE seminar. If you are going through a divorce or recently finalized one and are ready to discuss crucial updates to your estate plan, contact the experienced Indianapolis estate planning attorneys at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.

Paul A. Kraft, Estate Planning Attorney
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