Things To Consider About Your Estate Planning After Divorce

Divorce impacts all areas of life, and while this challenging transition has a deep effect on relationships, emotions, and personal matters, it also affects finances and estate planning. Many estate documents were created in light of a marital agreement, as most people name their spouses as beneficiaries and depend on them to intervene on their behalf if they are unable to. When it comes to estate planning after divorce, many forms and documents may need to be adjusted to reflect changing life circumstances.

If you wish to learn more about divorce law, consider speaking with an experienced Arizona estate planning attorney from Sullivan Shick by calling (480) 719-2558.

How Does Divorce Affect a Will?

According to the Arizona Legislature, any responsibility of a former spouse to represent the divorced spouse in a fiduciary capacity, whether that be as an executor, trustee, or personal representative, is revoked. Additionally, the right to any property appointment is also revoked, as in a bequest in a will.

This means that the divorced spouse will no longer be considered as either a beneficiary or executor of a preexisting will. However, this does not mean that no adjustments are necessary. With the divorced spouse being looked over in the will, the bequests will then fall to the alternate or residuary beneficiaries named in the will.

With the changes that come with divorce, it may be beneficial to reevaluate the primary beneficiaries for a more robust estate plan. This will help to ensure that each bequest is going to the beneficiary that the testator chooses.

How to Evaluate Preexisting Documents

When estate planning after divorce, several documents will need to be either adjusted or completely renewed.

Wills

The will is the most obvious document that will need to be amended after a divorce. Most people will list their spouse as their primary beneficiary or even their executor, so it is important to adjust this.

In some cases, there will not be much adjustment necessary, provided that the state cancels gifts and executorship upon divorce. If the testator is happy with the alternate beneficiary, they may not even want to amend the will.

However, if the testator wishes to change their will after a divorce, they may need to submit a codicil. According to the Arizona Legislature, a will includes any codicils that revoke an executor, expressly exclude the rights of an individual, or otherwise amend the original intent of the will. Alternatively, some people choose to revoke the will entirely and create a new one that has no attachments to the divorced spouse.

Living Trusts

Similarly to the will, any living trusts may need to be amended or revoked in the event of a divorce. This may have already happened as a result of the divorce proceedings and settlements, but it may be beneficial to review any jointly owned trusts.

Some trusts, however, are irrevocable depending on the terms set when the trust was created. Any beneficiaries named in the trust may not be able to be altered, due to the document’s nature.

After divorce, it may also be beneficial to create a trust instead or along with a will, as trusts do not go through probate court which may expose them to claims from the ex-spouse.

Power of Attorney

As a part of a marriage agreement, many spouses act on behalf of the other and are granted power of attorney (POA), which allows them to make many varying decisions should the individual in question be incapacitated. However, in the event of a divorce, this power of attorney may not be desirable.

Many states automatically revoke this power of attorney in the event of a divorce. Still, depending on the nature of the divorce, it may be beneficial to ensure you have revoked this power of attorney. It may help to notify any relevant legal entities of the change and name a new power of attorney.

Healthcare Proxy

Similar to power of attorney, peoples’ spouses are often appointed as their healthcare proxies as well. This position is specifically designed to empower an individual to make healthcare-related decisions on behalf of another.

While it is perfectly legal for an ex-spouse to remain the individual’s healthcare proxy, it may not be desirable to do so. Much of this depends on the nature and causes of the divorce, as well as the capability of the ex-spouse to make such decisions.

Note that the healthcare proxy is empowered to make decisions on behalf of the individual if they are ever incapacitated and unable to express their own wishes. The healthcare proxy is given the authority to act on their behalf and make these decisions for them should they be unable to.

If you want to know more about how to appoint and revoke a healthcare proxy, consider meeting with an experienced divorce lawyer at Sullivan Shick.

Divorce Settlements

While much of this process is straightforward, it can be affected by a divorce settlement. Every divorce settlement is unique and can have an effect on estate planning after divorce. Decisions and agreements made during the divorce negotiations may impact things such as bequests in a will, the ownership of a trust, guardianship of children, and many other things.

Every situation is unique. Sometimes the proceedings may revoke a trust and distribute the assets as per the agreements made in negotiations, whereas other times those assets may be in a protected irrevocable trust. It is important to consider all of the details when proceeding with estate planning after divorce.