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Do I need to update my estate plan after divorce?

After the dust settles on your divorce, you may think your ex-spouse is out of your life forever. Unfortunately, you may be mistaken. The judge divided your IRA, but did you change the beneficiary designation on your life insurance policy? You changed the title to the house, but did you choose a new executor of your will?

5 reasons to update your estate plan after a divorce

Although a divorce proceeding divides your assets, it does not rewrite your estate plan. Here are five reasons to update your estate plan after a divorce:

  1. Your will names your ex-spouse as executor or devisee. Most people name their spouse as primary devisee and executor of their will. California law generally recognizes that your ex-spouse is revoked from your will, but does not change any other provisions of your will. Who do you want in charge of your estate after you die? Are your contingent devisees still valid? If you have minor children, you may want to consider naming a guardian and custodian for them in your will.
  2. You had a trust divided in the divorce. Most living trusts are considered community property, so if you and your ex-spouse had a trust, the judge probably divided the assets as part of the divorce. You need to consider whether you want to create a new trust to replace the old one.
  3. You have not updated your IRA/brokerage account beneficiaries. Although your ex-spouse already received his or her share of the account in the divorce settlement and will be removed as your beneficiary, you should update the people you want as your new beneficiaries on these accounts.
  4. Your life insurance policy still names your ex-spouse as the beneficiary. Unlike most probate and non-probate documents, your life insurance policy will not automatically remove your ex-spouse as a beneficiary. You must make this change yourself.
  5. You have an advance health care directive or power of attorney. California law will automatically revoke your ex-spouse as your health care agent in your advance health care directive (living will), but you need to give careful thought to the person you would like to place in that role. Like your advance health care directive, the divorce decree revokes a power of attorney, so you need to draft a new document to name your attorney-in-fact.

You should always review your estate plan after any major life event to make sure it still accomplishes your wishes, but divorce is a special circumstance that does not just require review. It requires action. And if you have not yet created your estate plan, now is the perfect time to do so.

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