There are few things in this life as emotionally exhausting as a divorce. Not only are you grieving an ended marriage, but you are immediately tasked with a pile of paperwork to review and sign. Between bank statements, proof of income, mortgage statements, tax returns, retirement account statements, and more, it’s easy to feel like you’re drowning in documents.
During this whirlwind of signatures, it’s easy to put estate planning documents on the backburner because you assume you’ll have time to update them later when the sky clears a bit. The unfortunate truth is that since we can never be certain of the future and the time we have left, updating these documents as soon as possible is crucial after a divorce if you want to prevent disputes.
Here are some of the documents you should review with your estate planner immediately following a divorce.
Last Will and Testament
Upon death, a Last Will and Testament provides legal direction for how a decedent’s estate and assets are distributed. Most married couples assign each other to be the primary beneficiaries of their assets in their individual wills. After a divorce, the majority of these people choose to make their children or new spouse the new primary beneficiaries. This is also a good time to review which assets you have selected to bestow upon friends, distant relatives, and charities.
Some people decide to create a new will with revised executors altogether rather than trying to modify a previous one.
Power of Attorney
This document allows you to name an agent(s) with the authority to make financial decisions on your behalf if you should become incapable for any reason.
Chances are, you and your spouse executed powers of attorney during your marriage, and most people do not want their ex to end up with that kind of authority. Make sure to speak with the attorney that drafted your power of attorney documents and get clarification about your arrangements. If you signed a durable power of attorney, your spouse may have access to all of your accounts and assets even while you are still competent, even if the assets are solely in your name. If that is the case, you can revoke the existing power of attorney and execute a new one.
Revocable and Irrevocable Trusts
While you may not be able to make amendments to your trust until after your divorce is finalized, you should consult with your divorce attorney to see if you have the option. If you do, you and your estate planning attorney should immediately amend your revocable trust to update any provisions currently in favor of your spouse and his or her family. If you named your spouse as trustee of your revocable trust, you will likely want to remove them and designate someone else.
Even if your trust is irrevocable, the Georgia Trust Code now allows for the amendment of irrevocable trusts in limited circumstances, so you may still be able to change some provisions. Depending on the amiability of your divorce, you may also negotiate the renouncement of your former spouse’s rights under your trust as part of your divorce settlement.
The divorce process is painful and complicated, but managing the financial side correctly will make the process easier in the long run and give you greater peace of mind moving forward.
If you are considering raising a will, trust, or estate dispute due to unfinished or improper financial planning following a divorce, we can help.
Gaslowitz Frankel LLC is Georgia’s premier fiduciary litigation law firm. Our legal team specializes in all aspects of fiduciary disputes, representing individuals, executors, trustees, investors, shareholders, and financial institutions in complex fiduciary disputes involving wills, estates, trusts, guardianships, businesses, investments, and securities. Contact us today at 404.892.9797.
