Divorce can be a stressful event because you have to deal with immense emotional trauma throughout the proceedings. Things can be challenging if the settlement isn’t happening on amicable terms. But the issues often extend beyond emotional ones, as you have to make significant financial decisions too. Your goals, priorities, and needs will change after this major step, so you will need to reassess your long-term financial plan and re-strategize it according to the changed circumstances.
While you may be more concerned about facts like alimony and child care, estate planning is another significant financial matter when going ahead with a divorce. Things change after you separate, and your spouse will not have the same rights on your property. You may also want to make some adjustments with estate planning if you have kids. Here are some measures that can help women with estate planning when a divorce is impending.
Start By Updating Your Healthcare Proxy
Typically, people name their spouse as the decision-maker in the health care proxy. It means that your spouse will make health care choices on your behalf if you are incapacitated due to a health emergency or accident. When you have a divorce in mind, you will probably not want your ex-spouse to have the right to make such significant decisions for you. You can start estate planning during divorce by updating your healthcare proxy and naming someone you can trust.
Identify What You Can and Cannot Change
After sorting out the healthcare proxy, it is advisable to have a good look at your financials and see where they stand. It makes sense to alter the beneficiary designation in your life insurance policies, pay on death accounts, retirement accounts, and pensions just after the proceedings begin. But most states will not allow changing the designations until the divorce is final. It is best to seek advice from a lawyer and estate planning expert to identify what you can change and how you can handle the things you cannot alter.
Revisit Your Power of Attorney
Revisiting your power of attorney should be on top of your mind when it comes to estate planning during an ongoing divorce. It is all the more vital if your terms with your partner aren’t amicable because they may take undue advantage of the existing power of attorney and get hold of your assets unlawfully. If you have doubts, consider executing a new power of attorney with fresh terms. Ideally, you should also serve notice of the revocation to your partner so that you can be on the right side of the law.
Create a New Will
If you are successful, there is a possibility that you may have accumulated assets over the years. You will probably have a will with your partner named in it. But you will definitely not want a feuding partner to have control over your estate. It makes sense to understand the divorce law and revise your wills and estates accordingly so that you can have exclusive rights on your property. Consider removing your partner as executor from the will. Moreover, you can name an alternative guardian in the will.
Consider Setting Up a Trust
If you have young children, it is a wise move to consider setting up a trust for handling alimony and child support. Trusts can also be a good option if you do not want your ex-partner to get guardianship of the kids in case of your death. You can create a revocable trust that names someone other than your spouse as the trustee. The legally-appointed trustee will have control over your assets and money. They can make decisions for the benefit of your children in the event of your death. If you already have a trust for your children, you may consider amending it and replacing the trustees to look after the estate if you die.
Check Your Prenuptial Agreement
You will have to go the extra mile with estate planning during a divorce if you have a prenuptial agreement with your partner. Not following the clauses of the agreement can land you in legal trouble, which is the last thing you will want to happen at this stage. Ensure that your divorce attorney has a good look at the document. They will guide you about what your partner is rightfully entitled to. Alternatively, the agreement may work in your favor, and you may claim your share from your partner as well.
Decide the Assets for Your Spouse
Sharing assets is another significant issue for divorcing couples as your partner may seek a share in your assets. Even as you may want to disinherit your spouse completely, the law may not allow it. If you still do it, your partner can contest the will and claim a part of your assets. It is vital to understand the law to decide the assets that you are willing to leave to the divorcing partner. You can fight it out if you still want to give them nothing. Discuss your options with your lawyer and choose wisely, particularly if you wish to close things quickly and smoothly.
Go Through the Plan After the Final Settlement
While you must invest in estate planning during the divorce proceedings to secure your assets, it is only a temporary measure. You must go through the estate plan once things are settled. It is the right time to consider the requisite updates in light of the divorce. You may change the beneficiary designations now, which you must do at the earliest. You will not want to risk having the ex-spouse still named as your beneficiary because it can lead to litigation with your legal heirs in case of your death.
When divorce proceedings are on, you need an estate planning specialist as much as a divorce lawyer. Having an expert handling financial matters gives you peace of mind that you can save your assets from the partner you no longer trust. The professional will also help you protect the rights and future of your children, as they matter the most at this stage.