Deciding to end your marriage can be difficult and the process that follows is stressful and emotionally exhausting. Although it may be easy to overlook, it is important to review your estate plan as soon as possible to ensure that you are protected against unintended consequences following your divorce. Estate planning can provide peace of mind, ensuring that your assets are protected following your divorce. It also allows you to have a say in who receives your belongings and allows you to choose who will make your decisions if you are incapable of doing so. Whether it happens due to oversight or improper planning, here are some of the most common estate planning pitfalls that occur following a divorce.
According to Forbes, the biggest estate planning mistake someone can make is not having a plan at all. A recent poll found that close to 60% of people don’t have a will or estate plan in place, and many people are under the false impression that their next of kin will automatically inherit their assets, but this doesn’t always happen. When someone dies without a will or an estate plan, their properties are subjected to probate, which is an expensive and time-consuming procedure. Your children will also have to invest time and money if you don’t have an estate plan in place. According to Smart Asset, the state of California will determine who gets what after the person passes away when there is no will or estate plan in place, and the final decision may end up being against your wishes. Although estate planning may be the last thing on your mind following a divorce, it is important to make it a priority.
One big mistake that can cause enormous complications is forgetting to update an estate plan, especially after major life events such as divorce. Estate planning documents and beneficiary forms should be reviewed every couple of years, and always after a change in family status, including birth, death, divorce, or relocation. Experts recommend updating your will every five to seven years, and your health care power of attorney and financial power of attorney every three years. The National Law Review points out that provisions under your will or revocable trust benefitting your former spouse are revoked by law upon divorce, but it still is a good idea to review your estate plan during this time to determine who will inherit what at the time of your death and who will serve as your executor, trustee of any trusts for children or other beneficiaries, as guardian of any minor children, or as your agent under powers of attorney.
The last estate planning pitfall you want to avoid making is not seeking help from a professional when it’s needed. Research shows that women more often than men make the mistake of taking on the estate planning process alone. In this case, women may be best served by having an estate-planning attorney and a financial advisor who is experienced and can be a valuable resource during this time. Without the help of these professionals, it’s possible to overlook important aspects of the estate-planning process. By having a team of experts helping with your estate plan, you can take comfort in knowing that your future will be taken care of according to your wishes.
The emotional and financial stress caused by the end of a marriage means that estate planning is not always a top priority for many, but this can lead to serious consequences. Estate plans need to be reviewed, revised, and replaced after any major life event, especially divorce. And that review needs to include not only a new will and power of attorney but needs to address your entire estate plan, including your financial accounts and your legal documents.
While the emotional effects of facing a divorce may delay consideration of a party’s estate planning documents, it is important to consult with an experienced estate planning attorney together with your family law attorney to protect yourself and your property. By avoiding these common estate planning pitfalls, you will help ensure that you, your loved ones, and your assets are protected.