Critical Estate Planning Steps You Need to Take After Your Divorce

 Posted on May 14, 2020 in Estate Planning

Getting a divorce can sometimes make it feel as if your world has been turned upside down. Between dealing with the financial consequences of your divorce and managing child custody or spousal support concerns, you may feel like there are almost countless tasks to complete.  In all of the chaos, it can be easy to forget important estate planning considerations. Unfortunately, if a person divorces, beneficiary designations and certain other estate planning arrangements do not change automatically. You will need to update such provisions manually, and a qualified estate planning attorney can help.  

Review and Revise Your Will

Only about 40 percent of U.S. adults have a will or other estate plan in place. If you already have a will or trust that describes your property distribution wishes, you are already ahead of most Americans. However, you will want to read and update your will after divorce. According to Illinois law, any directions in your will that refer to your spouse are made void once he or she becomes your ex-spouse. However, any provisions that address inheritance for your ex-spouse’s family members remain valid. It is always a good idea to go over your will after divorce and make sure it still reflects your current wishes.

Change Your Beneficiaries on Your Retirement Accounts

If you have an IRA, 401K, or other retirement plan, you will probably need to update the beneficiaries listed in your policy. As a part of your divorce settlement, you may be required to share retirement funds with your ex-spouse. However, any remaining retirement funds should rightfully be yours. If your spouse is currently listed as the beneficiary on your retirement account, you need to change this sooner rather than later. Some divorced individuals still want their spouse listed as a trustee for their children. If this is your situation, read through your retirement policy and other estate planning documents any make any necessary changes so that they documents reflect your wishes

Update Your Powers of Attorney

A financial power of attorney is a representative that you designate to make financial decisions on your behalf if you are incapacitated due to a major illness or injury. A healthcare power of attorney is a representative who serves a similar function for healthcare decisions. Most married individuals have their spouses listed as their power of attorney. If your spouse is listed as your power of attorney, your divorce will void your arrangement automatically. This means that you will need to select someone else and update your power of attorney documents.

Contact a Lombard Estate Planning Lawyer

At A. Traub & Associates, we realize that a divorce can dramatically change your life. We are here to help you update your estate plans so that they reflect your current wishes. Schedule your confidential consultation with a DuPage County estate planning attorney by calling our office at  630-426-0196 today.

Sources:

http://www.ilga.gov/legislation/ilcs/ilcs5.asp?ActID=2104&ChapterID=60

http://www.ilga.gov/legislation/ilcs/ilcs5.asp?ActID=2113&ChapterID=60