Changing estate plans during a divorce

On Behalf of | Jun 21, 2018 | Estate Planning

Estranged Minnesota couples expect that a divorce will lead to a number of significant financial, emotional and practical changes. However, there are additional issues that are often not addressed yet can have long-reaching effects and that should be handled in order to avoid problems later down the line. Estate planning is one of these concerns, as the decisions about what to do with property after death and who to trust with key decisions may change after the end of a marriage.

In many cases, a married couple may have developed an estate plan together. After a divorce, it is often necessary to revise or replace these documents in order to reflect the current familial situation and priorities. There are some changes that people can make to their estate planning documents while the divorce is pending, while others will need to be made only after it is finalized. One of the first actions people can take is to update their health care proxy naming the person who can make decisions about their medical treatment if incapacitated. While a spouse would be a logical choice during marriage, this is one document that can be changed while the divorce is pending.

Similarly, powers of attorney that were created during the marriage will need to be revoked and re-executed to provide a different person with the ability to make financial decisions in case of incapacity. Other changes, like altering the beneficiary designation on retirement accounts, life insurance, investment plans and pensions, will need to be handled after the divorce is finalized.

The execution of new estate planning documents like wills and trusts can be important both while the divorce is pending and after it is final. An trusts and estates attorney can advise clients about the next steps to take in bringing an estate plan in line with the reality of divorce.