People are always forewarned about keeping up to date on estate planning documents, but those who do not update their documents after a divorce can face the biggest issues if the unexpected happens. Not only should you address estate planning after divorce and update your documents and beneficiary designations, but it is also vitally important that you follow through on the transfer and documentation of assets before the divorce is complete.
Avoid Unintended Beneficiaries of Your Estate
Although you already have a million other things on your mind, once you file for divorce you should also update your estate planning documents. Estate planning after divorce includes a review of all wills, trusts, retirement accounts, life insurance policies, annuities, deeds, and any other documents that may list your soon-to-be ex-spouse as a beneficiary on the account.
For example, one couple received a multi-million dollar settlement when the husband was injured in an accident. The couple had signed a prenuptial agreement before getting married, but the husband put the settlement into a trust that named the wife as the beneficiary. After a decade, the couple filed for divorce, but the husband never changed the beneficiary designation on the trust.
Two days before the divorce was to be finalized, the husband died. State law provided that the divorce was not final until the decree was signed, thereby making the soon to be former spouse the beneficiary of the trust. She got to keep the millions in the trust because the designation was never changed.
Moral of the Story – Make Estate Planning After Divorce a Priority!
The moral of the story is to change your estate plan immediately, or soon after, the filing of divorce. If you do not and you die, your former spouse will receive your assets prior to the finalization of the divorce. In addition, your former spouse will usually also be in control of your assets as the personal representative and trustee of any trust unless it is changed prior to the finalization of your divorce.
Even if the divorce is relatively amicable, you should still get any and all orders regarding your estate filed as soon as possible. If something happens in the interim, the results can mean extended time and cost for others to get things resolved.
For example, one couple decided to divorce and agreed to split their retirement plans in half. It required a divorce attorney to file three sets of orders with the court. Unfortunately, all the copies were not signed and filed when the husband passed away. As a result, the orders had to be refiled and the costs had to be borne by his former spouse. There was no opportunity to recalculate the splitting of costs once one spouse had passed away.
Low-Cost Options For Estate Planning After Divorce
It cannot be emphasized how important it is to keep your estate planning documents up to date. After all, having a plan ensures that your family and financial goals are met after you die.
Additionally, it is in your best interests to reach out to someone who can help you craft all necessary documents during the process. The non-attorney professionals at A People’s Choice are happy to help you draft these documents today.
If you are considering going through 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, information can be provided to us 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.