For individuals in higher financial net-worth brackets, estate planning is an absolute necessity. The goal of estate planning is to guarantee the protection of those closest to you when you can no longer ensure their well-being and look after their financial security.
Each plan is unique and customized. It is designed to reflect your wishes and life choices. Those choices are critically important when developing a financial plan
Most married couples who have estate plans name each other as their personal representative, power of attorney and beneficiary. Following a divorce, it’s highly unlikely that the former spouses want each other to retain control over their assets or health care decisions should they become incapacitated.
Estate planning is even more critical after a divorce, especially if you do not have any existing estate planning documents. There are numerous things that will need to be changed, such as your will, power of attorneys, and beneficiaries. Please see the resource tab: Top 10 Things to Do, Change and Consider.
Many divorcees assume that they cannot make changes to their estate plan during divorce proceedings. Both separation and divorce require immediate action to update your estate plan. Although there are a plethora of issues to deal with, with divorce, it is essential to revise your estate plan when the relationship ends, not when the marriage is formally over. Find out what you can and cannot alter. Estate planning during divorce often involves temporary measures. Once the divorce is finalized revisit the plan to ensure it is tailored to your new situation.
Estate planning after divorce begins with finding a new estate planner. It will almost undoubtedly involve finding a new estate lawyer. The estate planner and the estate lawyer who assisted you and your former spouse with the estate plan created while you were married cannot ethically assist either spouse individually. As you start your new life after divorce, you will need to seek out many different professionals. It may seem extremely onerous, but it’s an essential step for a completely fresh start.
Make sure an estate planner is part of your team as you navigate the divorce process. This is perhaps the most important part of your plan. An estate planner can review the divorce settlement and look for any gaps. Are you and your heirs adequately provided for in the event of your ex’s death? What about your wishes for the children if you pass away while they are still young? There are so many different parts to divorce, and some of these key considerations can be easily overlooked.
The Importance of Having a Will
A will is probably the most basic of estate planning tools. A will allows you to demonstrate how you wish your estate to be distributed upon your death. It also allows you to choose who will administer the assets that form your estate, and to specify how much authority will be granted to this individual (the executor). This individual may have to deal with a variety of issues such as family problems, unique assets, and determining who will look after minor children. If you do not have a will then you will die “intestate.” In this event, the “rules of intestacy” in any given jurisdiction will determine how your estate will be distributed. These decisions may be totally contrary to your wishes and this process will also undoubtedly significantly delay the settling of your estate.