While a separation agreement and divorce can help to untangle your assets from your ex-spouse’s, a review of your separation agreement, assets, and estate planning documents with an estate planning attorney can help ensure how your assets are handled or disposed of, if you become incapacitated or die during the separation proceeding or after divorce. The following isn’t a complete list of what you should review with an estate planning attorney; however, it’s a good start:
Your separation agreement or divorce decree: Your divorce decree may incorporate a separation agreement or equitable distribution and custody orders of the court.
Previously signed estate planning documents: If you named your former spouse as a fiduciary (e.g., executor, trustee, health care agent, attorney-in-fact, etc.) or beneficiary, provide copies of those documents to your attorney for review. For example, the separation agreement or divorce decree may not revoke your former spouse as the named attorney-in-fact in your financial power of attorney.
Assets which have beneficiary designations: Make sure you change your designations. Unfortunately, for qualified retirement plans such as a 401(k), you can’t change the beneficiary designation from your ex-spouse without a qualified domestic relations order (“QDRO”), or a consent document signed by your ex-spouse.
Lists of assets and debts: Separate lists for yours and your ex-spouse’s. Often, you and your ex-spouse have become jointly and separately liable on debts (e.g., mortgage), and a divorce decree and/or separation agreement rarely changes your liability on those debts.
Guardianship of minor children: Try to come to an agreement with your ex-spouse regarding who will be the guardian of your children if something happens to you both, to avoid argument between your and your ex-spouse’s families.
List of primary and secondary fiduciaries: Decide who will handle your health and financial decisions (during your lifetime and after) for you and your beneficiaries. You may need a personal representative for your estate, trustee for any trust, guardian for any minor children, health care agent under a health care power of attorney, and attorney-in-fact under a financial power of attorney.
It‘s important to seek an experienced attorney for legal advice regarding updating your estate plan while you’re handling your separation and/or divorce.