Divorce marks a significant life transition. As a result, it demands attention to various aspects, including the often-overlooked realm of estate planning. As you navigate the complexities of separation, it becomes important to reassess and update key components of your estate plan.
Doing so helps ensure that your wishes align with your current situation. It also helps safeguard your assets.
1. Beneficiary designations
An important area to revisit during divorce is the beneficiary designations on your financial accounts, life insurance policies and retirement plans. Failing to update these designations could result in unintended consequences. For example, your ex-spouse could potentially inherit assets you intended for others. Take the time to review and revise these designations to ensure they align with your current wishes.
2. Estate distribution and guardianship
As divorce reshapes your family structure, you must reconsider where your assets will go and who will assume guardianship of any minor children. Update your will and any trust documents to reflect your changed circumstances. Also, if you named your ex-spouse as the guardian for your children, you may wish to appoint a new legal guardian who reflects your current choices and priorities.
3. Power of attorney and health care directives
Revisit your power of attorney and health care directives amid divorce. These documents grant others the authority to make financial and medical decisions on your behalf if you become incapacitated. Given the changed dynamics of your personal life, it is important to reassess who you trust to fulfill these roles. Update these documents to appoint individuals you believe will act in your best interests.
Per the Centers for Disease Control and Prevention, Pennsylvania’s divorce rate is 2.4 for every 1,000 marriages. Revisiting and revising your estate plan empowers you to navigate this transition with foresight and control over your financial future.