For many people, going through a divorce seems like an endless tunnel with the light that seems like a long time coming. When the light does come, and the process is over, the last thing a person might want to do is to think about death. You are looking forward to a new life!
Future planning may take a back seat as a person gets used to single life again, but the reality is that things have changed, and you need to consider how that affects your estate planning. The last thing you probably want to happen is for your ex to gain control of your estate, or worse – take your property – after the divorce.
You have future planning to do. Not only has your present life changed, but your future is different as well, and your estate planning needs to reflect your new future.
If you are going through a divorce, planning for after your divorce is a good idea. You should at least know that there are some things that should not be put off. Once you find your equilibrium, you should plan for the new future that you have. If you have already gone through a divorce, but you have yet to plan for your future, now is the time.
Following are five (5) areas in which a person should plan for after the divorce.
- Financial Planning. Living life on your own is different than living life with someone else. You don’t have the efficiencies of two people living together in one household. Whether you have always budgeted, or never, getting some input from a financial planner is a good idea – not only for daily life, but to plan for your future that now looks different than what it was.
- Beneficiary Designations. Most people have life insurance, IRAs, 401(K)'s or some combination of qualified plan assets or other assets that have beneficiary designations. Most people designate their spouses as beneficiaries. If you are getting divorced, or are recently divorced, you need to change your beneficiary designations. You may not be able to change some of them without your spouse's consent while you are still married. Once you are divorced, however, you no longer need your ex-spouse’s consent. Any asset that has a beneficiary designation should be changed right away because, when you die, your ex-spouse will receive those assets if he/she is the beneficiary regardless of the fact that you are divorced if he/she is still listed as the beneficiary.
- Powers of Attorney. Having Powers of Attorney in place in the event that you become incapacitated at some point in your life, whether temporarily or more permanently, is always a good idea. Without a power of attorney in place, someone would have to petition a court to become your guardian in order to have the ability to manage your affairs and make decisions for you if you cannot manage your own affairs and make decisions for yourself. It could even be your ex-spouse!
By doing Powers of Attorney, you can designate people of your choosing who will be able to manage your affairs and make decisions for you without having to open a guardianship estate, and you will avoid the possibility of someone you don't want, like your ex-spouse, becoming your guardian.
- Last Will and Testament. Whether you have already done a Will, or haven't done one yet, you should think about doing a new Will once your divorce is finalized. It is even more important for a single person to do a Will because you no longer have a spouse who would be your default heir. If you have minor children, or you are concerned about the influence of your ex-spouse on your children, you will want to do a new Will so that you control who has access to your assets, where they will go, and who will have authority over them.
- Revocable trust. The ultimate vehicle for maintaining control over your assets is a revocable (“living”) trust. A Will gives you a measure of control, but a Trust gives you the greatest measure of control. You can explore the differences between a Will and a Trust with a reputable estate planning attorney who can help you to make sure that your future and the future of your children and your estate is in your hands, and doesn't fall into the hands or under the influence of your ex-spouse.
When your divorce is over, the future lies in front of you. Your planning has just begun. Take control of your future by doing the planning you should be doing. Don’t put it off.
For more articles on estate planning topics, see the Fox Valley Estate Planning Blog. For articles related to family law matters, visit Drendel & Jansons Family Law Blog. For additional articles on various topics of law, visit the general Drendel & Jansons Law Group Blog. For various legal resources, visit the Drendel & Jansons Resource Page.
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