November 22, 2024
9 Essentials for Divorce Estate Planning and Asset Updates
November 22, 2024
Divorce can be tough -- especially with given the list of things to sort out, including doing all the paperwork and figuring out your next steps. One important task is updating your estate planning documents to fit your new situation. This means changing beneficiaries, updating guardianship, and deciding who gets what in your household. But don’t worry—this guide is here to help! We’ll walk you through everything you need to know about updating your estate plan after a divorce. Plus, we’ll show you how Nemu’s app for splitting property can make the whole process a lot easier.
One of the first steps you’ll need to take in post-divorce estate planning is updating your will. Your will probably includes provisions for your former spouse, which may no longer make sense. What does that look like? Most importantly you’ll want to name new beneficiaries and remove references to your ex-spouse (unless you still want them there).
Beneficiary designations on accounts like life insurance policies, retirement plans, and bank accounts will also need to be updated. The best way to go about doing this is to contact your financial institutions. This is especially important when children are involved and you’re dividing personal assets as you’ll want to make sure that all your assets go to their intended recipients. This may include financial sums but could also be for smaller things like meaningful personal items.
Your power of attorney documents should be reviewed and revised after a divorce. Your ex-spouse may have been designated to make financial or legal decisions on your behalf, but that could change once the divorce is finalized. As such, it’s a good idea to appoint a new trusted individual to take on these responsibilities.
Healthcare proxies, or medical power of attorney documents, must also be updated in divorce and estate planning. It’s best to choose someone other than your former spouse as the designated person to make medical decisions for you in the event of a life-changing emergency. While it’s uncomfortable to think of these things, it is important to plan ahead for the “what if” moments in life.
If you have young children (minors), you may also need to revisit guardianship provisions in your estate plan. Update your will to reflect your current wishes for who should take care of your children if something happens to you. Clear guardianship directives can prevent future legal disputes.
Trusts set up during your marriage likely need to be modified in divorce and estate planning. Revocable living trusts, in particular, should be reviewed to remove your ex-spouse as a trustee or beneficiary. The best way to go about this is to consult with an estate planning attorney to ensure that all trust documents are properly adjusted.
During the divorce proceedings, you’ll need to address how property and assets are divided in your estate plan. Questions like, “Who gets the house after a divorce?” will inevitably pop up, but it will be more than that. Meaningful furniture items and precious heirlooms will also need to be properly divided. To protect yourself and your ex-spouse, document everything or consider using a division of assets app like NEMU. This will help prevent misunderstandings and conflicts later on.
Divorce can have significant tax implications that affect your estate plan. Consult with a tax advisor to understand how changes in your marital status impact your estate. Proper tax planning can help minimize tax liabilities for you and your beneficiaries.
Navigating divorce and estate planning can be complex, and professional guidance is invaluable. Estate planning attorneys, financial advisors, and tax professionals can provide expert advice tailored to your situation. Their assistance ensures that your estate plan is comprehensive and up-to-date.
NEMU's personal property splitting software facilitates a planning process for all of your household items and treasured heirlooms after a divorce. Our app helps you catalog and divide the items that are meaningful to you, and manage your estate efficiently through the sale of what remains. With NEMU, you can ensure that your estate plan reflects your new beginnings accurately.
