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Should You Update Your Estate Plans After a Divorce?

With a sizable percentage of all marriages ending in divorce, most people understand the basics of things like negotiating child custody and dividing assets. However, one important thing that divorcing couples often overlook is estate planning. After any divorce, you need to adjust your estate planning documents.

A Divorce Will Automatically Update Your Will

The first thing you need to know about estate planning after a divorce is that your will might change automatically. Under New Jersey law, if you are divorced, any part of your will naming an ex-spouse or the relative of an ex-spouse will be invalidated. Furthermore, if your ex-spouse was named as an executor, that appointment will be revoked.

Keep in mind that this doesn’t provide complete reassurance after a divorce. Laws vary by state, so if you wrote the will in another jurisdiction or live somewhere else now, your ex might still be part of your will. If you die before you can formally file for divorce, the person who is still legally married to you can receive an inheritance. Furthermore, any leftover funds will just get divided among your remaining heirs instead of being distributed according to your preferences. Therefore, it’s a good idea to draft a new will after divorce instead of just relying on automatic updates.

It Might Not Be Possible to Change Trusts

When it comes to updating a trust, things get a little more complicated. If you had a revocable trust set up, it is not too late to change the beneficiary. This typically is not an automatic process, so you will need to think of a new beneficiary and formally change the documents. However, if a trust is irrevocable, making changes can be trickier. Once you put money or other assets in an irrevocable trust, you generally cannot change who gets the assets.

Whether or not you can disinherit your ex will depend on how the trust is worded. If you use a word like wife, husband, or spouse, the trust will go to anyone who fits that title when you pass away. However, if the irrevocable trust is for a specific individual, you can’t change it. This is why it’s important to consult with an estate planning lawyer before you first prepare a trust. The right wording can avoid complications in case you divorce.

Don’t Forget Power of Attorney, Pension, and Life Insurance Updates

Wills and trusts are the main estate planning documents that you need to update after a divorce, but don’t forget any other items. Power of attorney documents can give your ex the ability to handle your finances and make certain decisions about your health care. A disgruntled, soon-to-be ex can cause a lot of problems with these legal powers, so it can be a good idea to remove your spouse as the named agent as soon as you decide you will be ending your marriage.

Finally, think about pensions, retirement accounts, life insurance plans, and anything else that might list your ex-spouse as a beneficiary. You might be surprised to find all the ways your ex is associated with your estate planning. For example, they could be listed as the trustee of a life insurance policy in your child’s name, even though they are just the child’s ex-stepparent. There can be a lot of variation in these items, so there’s no guarantee that your ex will be removed once you file for divorce. It is better to properly update your documents rather than assuming that your divorce removes your ex from your financial affairs.

If you need to update your estate plans, The Knee Law Firm is here to help. Our team of estate planning lawyers can reassess your estate planning needs and handle all relevant paperwork. With our assistance, you can change your estate plan quickly and conveniently. To schedule your consultation, call our Hackensack office at 201-996-1200 or fill out our online contact form.

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