On your to do list when you are divorcing is to redraft your estate plan. Choose a new attorney or a different one from your spouse to create your new plan. The first action is to update your power of attorney documents.
- Before the divorce is final you can change your medical and financial power of attorney documents. You will name the individual who will make financial decisions for you in the event that you are unable to. This individual will be able to talk to your bank, creditors, loan company, phone carrier, etc., on your behalf. If you are unable to handle your financial life for a period of time this individual is critically important and must be someone you trust implicitly. Same goes for your medical power of attorney document; you will want to change from your spouse or former spouse to a close friend or relative as this individual will make medical decisions on your behalf if you are unable to. You will probably not want your soon to be ex spouse making these decisions on your behalf.
Destroy your old documents and note in your new documents that they replace the old ones and list the date of the documents being replaced.
- Review your beneficiary designations and update where necessary. Remember bank accounts, investment accounts, IRAs and insurance policies. Plenty of ex-spouses have inherited unintentionally, especially from accounts set up with past employers. Once an individual leaves an employer they tend to forget their retirement accounts and their listed beneficiaries. Contact the human resource department or go directly to the institution where the account is located and complete a change of beneficiary form.
- Check the titling of your home or any property that was owned when married. Many times the divorce decree will dictate these changes but if not or if you will be a sole owner you must correct any titles or deeds.
Follow what is mandated in the divorce degree which typically includes splitting accounts, retitling property and other assets. Individual retirement accounts can be split and then rolled over into existing accounts (of the ex-spouse that is benefitting).
And remember it's always a good idea to talk with your elder law attorney to make sure you have made all the necessary changes in titling, beneficiary designations as well as created a new estate plan for yourself as you move forward.