You’ve most likely been forewarned about keeping up to date on all of your estate planning documents. However, it’s equally important to remember that you must pay special attention to updating these documents following a divorce. Additionally, you should always follow through on the transfer and documentation of assets before the divorce is complete. There could be great consequences for failing to address estate planning after divorce and updating your documents and beneficiary designations.
The Consequences: Unintended Beneficiaries of Your Estate
Estate planning after divorce involves the review of all wills, trusts, retirement accounts, life insurance policies, annuities, deeds, and any other documents that may list your ex-spouse as a beneficiary on the account.
For example, say a couple receives a multi-million dollar settlement after the husband was injured in an accident. Then, the husband puts the settlement into a trust naming his wife as the beneficiary. After a decade, the couple files for divorce, but the husband never changes the beneficiary designation on the trust.
Then, two days prior to the finalization of the divorce, the husband dies. State law provides that the divorce was not final until the decree was signed, thereby making the future former spouse the beneficiary of the trust. She keeps the millions because the husband never changed the designation!
Make Estate Planning After Divorce a Priority
This common example demonstrates the importance of updating your estate before or right after filing divorce. Failing to do so prior to death may grant your former spouse rights to your assets. In fact, even if your divorce is amicable, you should still file any and all orders for your estate as soon as possible. This will help save time and money in the long run.
For example, say a couple were to divorce and split their retirement plans in half. However, not all parties sign and file the required documentation before the wife passes away. As a result, the living spouse must refile the orders, and is now responsible for the cost. Unfortunately, this situation provides no opportunity for recalculation of splitting the costs once the spouse has passed away.
Low-Cost Options For Estate Planning After Divorce
If you are considering a divorce, want to address your new estate planning needs, and want to avoid the high cost of attorney’s fees, contact A People’s Choice for low-cost legal document assistance. Although we cannot give legal advice, A People’s Choice can help you in preparing all the required legal documents to help you revise and update your estate plan without having to hire a lawyer.
If you need more information about estate planning, do not hesitate to call our office. A People’s Choice has been providing self-help legal document services for over 30 years and has established an excellent reputation in the community. When you are ready to prepare your paperwork, you can provide us with your information through our convenient online system, over the phone, or in person.
A People’s Choice provides estate planning document preparation services for filing in all courts throughout California.