How Does Divorce Affect my Estate Plan? (Video)
How Does Divorce Affect my Estate Plan?
I had a previous planning client come in after her divorce and ask if her plan needed an update because of her divorce. She had a Will and powers of attorney. My first answer was it depends on if your plan has language about divorce built into it.
And that is the answer, if you plan has contingencies for divorce built in, then you probably don’t need to update it. If it doesn’t then most of it will need to be updated or rewritten completely.
In general, powers of attorney are not affected by divorce unless they have language built in.
In general, trusts aren’t affected by a divorce unless they have language built in.
But, in Arkansas, gifts to an ex left in a Will are nullified by law. But, if they are named as executor, then unless the Will has divorce language built in, they will be the executor.
Beneficiary designations, beneficiary deeds, pay on death, and transfer on death are not changed by a divorce. All too often, an ex gets the payout from a life insurance policy or retirement plan because somebody forgot to change the beneficiary.
In general, it is best to have your documents reviewed after a divorce to make sure your ex is completely out of the picture.
By the way, the client that came in had language in both the Will and Powers of Attorney that automatically removed the ex.
How does divorce affect my estate plan?
- If your plan has contingencies built in, then you need it reviewed
- If you plan does not have contingencies built in, then you need a new plan
- If you have beneficiaries on your life insurance and retirement account, you need to review and change those beneficiaries if needed