Getting married is huge, but parting ways is even bigger. It’s the hardest goodbye. When you have shared your life with someone you loved enough to tie the knot, getting divorced is no joke.
When getting married, no one plans to get divorced. But life happens and so can the unexpected. Going through a divorce is never easy, there’s a lot to discuss, update, go through, and divide. No one wants to be in a property war after you get divorced.
Please know that you’re not in this alone! 23 Legal’s estate planning experts are here to help guide you through revising your estate plan after a divorce.
Why should you update your estate plan when getting divorced?
After getting divorced, it’s crucial to update your estate plan to make sure that your assets and property are distributed according to your wishes and no longer tied to those of your ex-spouse. In most cases, if you have an existing will, trust, power of attorney, or any other estate planning document, your ex-spouse is likely named as a beneficiary, executor, or agent. This means that if you pass away or become incapacitated, your ex-spouse would still have legal authority over your assets and medical decisions.
Updating your estate plan allows you to revoke any previous designations of your ex-spouse and designate new beneficiaries, executors, and agents. You may also want to consider updating your estate plan to reflect changes in your financial situation, including any property or assets acquired during your marriage or divorce settlement, as well as any changes in your family situation, such as the birth of a child or the death of a family member.
23 Legal’s Guide to Revising Your Estate Plan After a Divorce in Illinois
Trusts
If the state lets you amend your trust, you should get on it first thing. The same goes for your living will (as discussed later in the article). The key here is to decide what you want to leave to your partner after the separation—for example, gifts from her friends and family.
If you want your spouse to manage the trust for your kids, amend the trust accordingly or vice versa. Lawsuit challenges are prevalent in nasty divorces, and trusts are the only thing that protects beneficiaries in such cases. We recommend you have a chat with your financial advisor about creating a trust for your estate planning.
Life Insurance Policies
You will also need to amend the beneficiaries on your life insurance policies. The legal wording on your divorce paper doesn’t automatically amend the life insurance policy; that is a separate procedure that may involve your insurance agent as well.
Healthcare Documents
Having a healthcare power of attorney is common, also known as the designation of a patient advocate. This policy means that your spouse is in charge of your medical decision if you aren’t lucid enough to decide on your own. It can go south when you are divorced, so you must amend your healthcare proxy as soon as possible.
Annuities
Divorce is very common. What’s not common is that most couples don’t understand how important it is to divide assets before getting divorced, including retirement funds and houses. While some property and real estate assets are easier to divide, most involve complexities. Some physical assets are sentimental, while others come under joint ventures. These are more complicated to divide. So, this is another thing to be checked off from your list to alter in your estate plan.
Beneficiary Designation
Another alteration that you need to make immediately is beneficiary designations. It’s common to make your spouse the beneficiary on trust funds, bank accounts, and other financial matters. However, not changing that information after getting divorced is not wise.
Typically, you must change beneficiaries on retirement accounts, including IRAs, 401(k)s, 403(b)s, and pensions. You will need to get the forms from your financial institution, brokerage firm, or employer in case of the pension.
Power of Attorney
Next in line is the Power of Attorney. The divorce may revoke your will but doesn’t affect the EPA, Enduring Power of Attorney. If you don’t want your ex to make financial decisions on your behalf, you must also amend that. You must execute a new power of attorney, disabling the former and stripping your ex of any power in your financial matters. You will also need to distribute copies of the new EPA to all financial institutions for their record.
Living Will
There are two ways to update your living will after getting a divorce. You either update your will through a codicil, which means to make amendments, or write a new one. The latter is preferable because your divorce will bring so many changes. To remove the former will from the picture, you either shred the original or clearly state in the new one that the original is revoked.
Property Titles
Property titles are the most challenging bet of all when getting a divorce. You will be amazed at how divorce affects estate plans and how much you need to alter after a divorce. Every state has rules and regulations, your real estate attorney should be an expert in your state. This research will impact the division of your property, including the house you live in, so be thorough. There are two main types of property distribution:
- Equitable distribution: In this case, the property is divided fairly, not equally.
- Community property: In this case, the property is divided equally, It may not be fair, but many states follow this rule.
Research which of these rules your state follows and plan accordingly.
Death Benefit Nomination
Divorce is a huge thing, a turn in your life you may not have expected. And at such a time to think of death is downright morbid. However, it’s a must that you also consider the alteration of the death benefit nomination. Update your binding death benefit nomination because, in case of the unexpected, your ex will become the sole custodian of your funds and will have the sole decision to distribute the payouts.
Update Your Illinois Estate Plan with 23 Legal
We understand that the end of your marriage isn’t something you’d want to take lightly. Updating your estate plan after divorce is essential to ensure that your assets are distributed according to your wishes and that your ex-spouse no longer has any legal authority over your affairs. We always recommended our clients seek the counsel of an experienced estate planning attorney like Ben Weaver to make sure that everything is set up correctly and nothing is overlooked. 23 Legal can revise your estate plan tailored to your specific needs.
We’re here to help take some of this burden off your shoulders. Illinois estate lawyer Ben Weaver can help you amend your trusts, wills, property titles, healthcare POA, and more.
Is it time to update your estate plan?
Revise important legal documents with 23 Legal: (847) 447-6004
Why Choose 23 Legal
23 Legal offers Real Estate and Estate Planning legal services to individuals, families, community associations and small business owners throughout Chicagoland. We know how intimidating “the law” can be. In fact, when most people think of law offices, they think of stuffy leather chairs, huge wooden desks and pompous lawyers who charge outrageous fees. That’s not us! We believe in 1-to-1; the same lawyer should work with you all the way through. Whether you have an estate planning issue, family trust concern, or you have a legal problem in regard to a new home, business, real estate or remodel, you need a lawyer who cares. That’s where Ben comes in! We are great listeners; more than that, we are lawyers who believe that our clients always come first.
