WHAT YOU NEED TO PROTECT YOURSELF, YOUR ASSETS AND YOUR FAMILY POST-DIVORCE
Divorce can be a painful and overwhelming process, riddled with emotion, decisions and paperwork. It is easy to overlook or ignore other important aspects of your life following this difficult time. Nevertheless, you need to rebuild. In doing so, it is imperative, during or after your divorce, to update (or create) your estate plan in order to ensure that you, your assets and your family are all appropriately and adequately protected. A qualified trusts and estates attorney should be consulted, as soon as possible, in order to ensure that the following documents are in place and clearly reflect your intentions:
BENEFICIARY DESIGNATIONS: The beneficiary designations for your bank accounts, brokerage accounts, IRAs, retirement accounts, annuities and life insurance policies should all be updated to remove your ex-spouse and appropriately name a new beneficiary. All too frequently, these designations are overlooked and long-forgotten, with the proceeds of these accounts passing to unintended beneficiaries.
WILL AND/OR REVOCABLE TRUST: In order to prevent your ex-spouse from inheriting your assets and, thereby, potentially disinheriting your loved ones, you must update your Will and/or revocable trust. If you have minor or disabled children, your Will should designate a guardian for them, as well as a trustee to manage any assets passing to your minor or disabled children, upon your death.
HEALTH CARE PROXY AND LIVING WILL: A health care proxy is a document by which you designate an individual to make health care decisions on your behalf, in the event you are unable to make them yourself. Ensure that you destroy any previously executed documents naming your ex-spouse as your health care agent, and execute a new instrument designating the appropriate individual to serve instead. A living will should also be created to express your wishes concerning any health care decisions made on your behalf by your health care agent.
POWER OF ATTORNEY: Using a power of attorney, many individuals appoint their spouse as agent to deal with their financial affairs. It is important to execute new documents negating any powers previously given to your ex-spouse and appointing another individual to manage these important matters instead.
SUPPLEMENTAL NEEDS TRUST: During or after a divorce proceeding, many issues and difficulties may arise with respect to any disabled children of divorcing parents. There are special planning needs which need to be addressed both during and after the divorce, including whether a supplemental needs trust should be created.
TRUST AGREEMENTS: Advanced estate planning techniques, such as irrevocable life insurance trusts (ILITs), qualified personal residence trusts (QPRTs) and charitable trusts typically involve the creation of an irrevocable trust. These trusts may be difficult, if not impossible, to amend without detrimentally impacting the tax benefit for which they were originally established. An experienced trusts and estates attorney can help you and your trustee to explore options with respect to such trusts that better accomplish your wishes following a divorce.