Divorce and Your Estate Plan: Eight Steps to Take

There’s nothing easy about divorce. It feels as though your entire life changes overnight and it’s hard to manage the whirlwind of priorities as you look for your next right step.

And while there are a lot of steps to manage, an important one is to ensure that your financial plan matches your “new normal.” By this I mean making certain that your needs, newfound priorities, and redefined goals are reflected in your plan, and a great way to start this is by updating (or creating) your estate plan. 

But where do you start? In my experience, there are eight key issues you should think about and discuss with your estate planning attorney as soon as practical following a divorce. As part of this, please give your divorce decree to your estate planner to make sure they are aware of your obligations.

1. Update your Will

The first step is to revisit your ex-spouse’s role in executing your estate. You may want to keep them in your will, but most do not. Consider removing your ex-spouse as executor, so they are no longer responsible for the administration of your estate and replacing your ex-spouse with a family member, close friend, business partner, or corporate fiduciary. You should also confirm your ex doesn’t unintentionally inherit any of your assets. Most people choose to have their assets passed directly to their children or other loved ones. 

2. Rethink guardianship for your minor children

Your will also names guardians for your minor children. In most cases, this will still be your ex-spouse. If you had a contentious divorce or if there are mental health or substance abuse issues, you should name an alternate guardian in case the biological parent is deemed unfit. It could also be helpful to document any concerns in a memo stored with your estate plan.

3. Update powers of attorney for property & health care

These two documents name someone who can act on your behalf if you are unable or incapacitated. You may want your ex-spouse to continue to make decisions for you in the case of an emergency, but many divorcees prefer to name someone else. Whoever you decide to name as your agent should be someone who you trust implicitly. 

4. Create or amend your Revocable Trust

A Trust allows you to appoint a trustee to control your assets if you are unable to, and upon your passing, this document instructs the trustee on how they should distribute your assets. Review the terms of your trust and consider removing or replacing your ex-spouse (if they are named as a trustee and/or beneficiary) to ensure that your estate is handled in accordance with your new wishes.   

5. Update beneficiary designations on IRAs, 401(k)s, & life insurance

You’ve updated your will and trust, but don’t forget to update the beneficiaries on retirement accounts, life insurance policies, and transfer on death (TOD) accounts. In doing so, it’s critical to make these updates with the terms of your divorce in mind. In most cases, you will want to replace your ex-spouse with your children or a loved one, but your divorce agreement may require you to keep your ex-spouse as the beneficiary. If this is the case, you should update the beneficiary designation forms with the current, post-divorce date just to be sure your documentation is clean.

6. Review your life insurance needs

Many divorce settlement agreements require one or both parties to maintain life insurance. Many times, this is ignored, improperly handled, or never implemented. Review your obligations and your ex-spouse’s obligations with your estate planning attorney. They can talk to you about the benefits of establishing a separate trust to hold life insurance and ensure you are aware of changes and that obligations are maintained. 

7. Consider setting up a trust for your minor children

God forbid something happens to you; you want a trusted individual to control your minor children’s inheritance. If you do not want your ex-spouse making a decision over your wealth, consider naming a third party to act in your children’s best interests. 

8. Consider a prenuptial agreement if you get remarried

Following a divorce, many people say they will never get married again… but never say never. If you are considering remarriage, talk to your divorce attorney and estate planning attorney about a prenuptial agreement.

Closing Thoughts

The estate planning process is rarely fun, but once you button up your estate plan, you will gain clarity on the future, which is a critical component of moving forward. 

If you are looking for a trusted wealth advisor to help you navigate the divorce process or create and implement your new financial plan, Strategic Wealth Partners would be honored to help. Please don’t hesitate to reach out and get the conversation started.  


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