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Going through a divorce can be emotionally and financially draining. Once you’ve finalized your divorce, it’s important to revisit your estate plan to ensure it reflects your current wishes and circumstances. Here are seven important updates to consider making to your estate plan after divorce.
1. Update Your Will
Many people mistakenly believe that a divorce nullifies a will. While the majority of your will remains intact after divorce, any provisions involving your former spouse are revoked. So if your former spouse is named as your Executor or as a beneficiary of your estate, these provisions will be nullified. If you’ve named an alternate executor, this responsibility will lapse to them. However, it’s best to update your will altogether, ensuring it reflects the changes in your family structure and asset ownership.
2. Update Your Beneficiary Designations
In the state of Ohio, unless the divorce decree specifies otherwise, divorce will revoke any beneficiary designations identifying your former spouse. Because of this, many people do not prioritize revisiting their assets’ beneficiary designations.. However, this is an important update to make to your estate plan after divorce so that you can ensure your beneficiary designations reflect your new family structure and wishes post-divorce.
3. Create a Trust
Depending on your circumstances, you may want to consider setting up a trust to protect and manage your assets. Trusts enable you to avoid the public process of probate and allow you to create conditional provisions that will provide for your children or other loved ones should something happen to you. A trust can also provide for your children’s education and other needs.
4. Evaluate Existing Trusts
After a divorce, any trusts that were established during the marriage may need to be evaluated and potentially modified to reflect the new circumstances. The specific steps that need to be taken will depend on the nature of the trust and the terms of the divorce settlement. If the trust was established jointly by both parties, then it may need to be dissolved and the assets distributed according to the terms of the divorce settlement. Alternatively, the trust may be restructured so that each party receives a share of the assets according to their agreement.
5. Review Power of Attorney and Health Care Directives
Most people designate their spouse as their financial and medical power of attorney. In the state of Ohio, a power of attorney is terminated after divorce. Because of this, you will want to designate a new trusted agent as financial and/or medical power of attorney who will be able to handle your affairs and make medical decisions on your behalf.
6. Consider Planning for Long-Term Care
If you are getting older or have on-going health issues, you may want to consider planning for long-term care. This includes creating an estate plan that will protect your assets. In order to plan for the 5-year lookback period, it’s important to begin planning for long-term care as soon as you think it may be something you need down the road. For many, an estate plan after divorce will need to account for relying on one income instead of two. Medicaid pre-planning can be one important aspect of this.
7. Update Guardianship Nominations
If you have minor children, you may need to update your guardianship arrangements in the event of your incapacity or death. Talk to your attorney about your preferences and ensure that your wishes are reflected in your estate plan.
By taking the time to meet with an estate planning attorney after a divorce, you can gain peace of mind knowing that your estate plan is up to date and reflects your current wishes. Don’t wait until it’s too late. Take action today to ensure that your estate plan is in order and protects your interests and those of your loved ones.
At Pierce Legal, we get to know each of our clients, gaining a meaningful understanding and relationship with you that allows us to create a custom-tailored estate plan that will satisfy your specific and changing estate planning goals and needs. Our practice provides professional legal advice and guidance focused in the areas of asset protection through proper estate planning, business services, and real estate purchases and transfers. Contact us today to schedule a consultation at (330) 588-6115.