Four Tips for Estate Planning After Your Divorce

 Posted on November 09, 2021 in Estate Planning

A divorce can dramatically change the lives of both parties involved. After your divorce, it is important to ensure your financial assets are protected in response to your change in living circumstances. Here are four helpful tips on how to reevaluate your estate planning strategy after a divorce. 

1. Update power of attorney and living will.

If a situation arises when you are unable to make medical decisions, your power of attorney names the person who will make those decisions for you. Most spouses appoint each other as agents. After a divorce, it is time to execute a new power of attorney naming a new agent to make your medical decisions. This can be done by consulting our estate planning attorneys. 

2. Create a new estate plan. 

Especially if you have children, updating your will and/or living trusts is one of the most important steps to take after a divorce. If your will or trust is not up to date following your divorce, your ex-spouse may be eligible to inherit your assets after your death. You may also want to update your will to reflect your wishes on who should be in charge of any finances set aside for your children if they are still minors. 

3. Change beneficiaries on your major assets.

After your divorce is finalized, you will need to remove your ex-spouse as a beneficiary from your IRA, 401K, life insurance, and any other major assets or accounts. If something should happen to you before you are able to do this, your spouse may receive the assets upon your death. For assets such as your living trust, you can speak to your attorney about how a divorce may impact your specific case. 

4. Check in with your financial advisor. 

Because of the change in your household income after a divorce, it is important to reassess your financial situation based on your new circumstances. You will need to know what your most valuable assets are post-divorce, and how much you need to be saving based on what you will need for your retirement. You may also want to consider what your financial situation would look like in case of a medical emergency or the loss of a job. A professional trained in personal finance can help you work through the complexities of reorganizing your financial situation after a divorce. 

 If you or a loved one have recently gone through a divorce, the lawyers of Ariano Hardy Ritt Nyuli Richmond Lytle & Goettel, P.C. can provide you with legal help and representation. Contact our Elgin estate planning attorneys at 847-695-2400 to schedule a free consultation.