Not Updating Your Estate Plan After a Divorce Can Put Your Heirs at Risk

Illinois wills and trusts attorneysIf you have an estate plan in place, congratulations! You are already doing better than most Americans. Estate planning documents are not evergreen, however. Instead, the guarantor must review them regularly and update them whenever a significant change occurs. Perhaps the most overlooked (and potentially devastating) issue is that of divorce. Learn more about how not updating your estate plan after a divorce can put your heirs at risk, and discover how our seasoned Wheaton wills and trusts lawyers can help set things right again. 

Divorce and Your Estate Planning Documents

During a divorce, marital assets are divided and then distributed, which can drastically affect the value of your estate. As such, the exact details of your will or trust may change. There may be less to distribute to your heirs, or perhaps some specific assets went to your ex-spouse. In either case, your estate plan must be updated to reflect these changes in your net worth. Furthermore, you must practice due diligence to ensure that an oversight does not occur. For example, your divorce decree may state that your spouse is no longer entitled to any of your retirement pension plan, but if you do not change the designated beneficiary and you pass away unexpectedly, the money could still go to your ex-spouse, rather than the intended heirs. 

Updating Your Estate Plan After an Illinois Divorce

People often put off updating their estate plan after a divorce – perhaps because they have a new lease on life and do not fear being affected by the potential consequences of doing so. Yet, every day, tragic and unexpected events occur. Protect your heirs from mishaps by ensuring you update your estate plan as soon as your divorce has been finalized. Areas to focus your attention include:

Your healthcare proxy. While there are some divorced parties who may trust their ex-spouse to continue acting as their healthcare proxy, this is a pretty rare occurrence. Ensure that someone you care about and trust is put in charge of your medical decisions, should an accident occur, by taking the time to name a new healthcare proxy in your estate plan;

Your power of attorney. Just as you may not trust your ex-spouse to make decisions regarding your life, you may not want to trust them with your finances after a divorce has occurred. 

Your designated beneficiaries. While, in most cases, your will or living trust will dictate how assets are distributed upon your death, certain assets, such as pension plans and retirement accounts, cannot be overruled by an estate plan. Instead, the policy goes to the named beneficiary. Avoid wrongful disbursement by ensuring you update your beneficiaries. 

Guardianship of any minor children. While, usually, children will go to the other parent if one passes away, there are scenarios in which this option may not be appropriate (i.e. abuse or neglect). Furthermore, there is always the chance that you and your ex-spouse’s deaths will occur in-tandem. If this happens, the courts may struggle to determine who has rightful guardianship over your children (this could be especially true if your spouse has also named possible guardians in their own estate plan). Whatever your scenario, protect your children by ensuring that guardianship is considered and updated accordingly after your divorce. Also, be sure to update the trustee if you have a trust account for your children. 

How Our Wheaton Estate Planning Lawyers Can Help 

For most people, divorce signifies the start of a happier, more fulfilled life. The last thing you want to worry about is the possibility of your death. Stock, Carlson, Oldfield & McGrath, LLC can help. Backed by more than 40 years of legal experience, our DuPage County wills and trusts lawyers can examine your documents and assist you in making whatever changes are necessary. Call 630-665-2500 to schedule your consultation today. 

Source:

https://www.forbes.com/sites/christinefletcher/2019/01/08/9-things-you-need-to-know-about-estate-planning-after-divorce/#67dcac783e31

 

Do Not Overlook Estate Planning Documents During Divorce Process

estate planning and divorce, Illinois Estate Planning LawyerJust as June is typically referred to as the wedding month, January is quickly earning the moniker of divorce month. Statistically, there is a glut of divorce filings which occur on the first Monday of January, and those filings continue to occur on a steady pace for the rest of the month.

A person who is going through the process of divorce typically struggles with decisions such as child custody issues, property and asset division, as well as many other legal—and emotional—issues. Given all these upheavals, it could be very easy to overlook one very important issue which a divorcing person needs to address—the updating of estate planning documents.

If you currently have a will drafted, it most likely names your soon-to-be ex-spouse as an heir. There is also a good possibility that your spouse is also the executor of your estate, which means he or she controls whether or not your last wishes will be kept.

Even though you are going through a divorce, the breakup of your marriage does not change your will and whether or not your spouse inherits your property and assets, unless you make that legal change. This is also true for couple who have completed the divorce process and are no longer legally married. If you do not change your will, your ex-spouse will inherit the same assets and property you wanted him or her to have when you were married.

This is also true for any other property, financial accounts, and insurance policies you have. If you are legally divorced, make sure you remove your ex as beneficiary of those items. If you are currently going through the divorce process, make sure to check with your divorce attorney before making any changes.

For people going through a divorce who do not have a will, the state of Illinois decides who will get your property. If you only have a spouse, but no children, then your spouse will inherit everything. If you have children, then your spouse will inherit half, and your children will inherit the other half. Therefore, if you currently do not have a will, it is important to have one legally drafted in order to prevent your spouse from inheriting any of your property or assets.

If you are currently considering a divorce, contact and experienced DuPage County estate planning attorney to ensure that your estate is fully protected in the event something should happen to you before your divorce is finalized.

Sources:

http://www.marketwatch.com/story/divorce-filings-jump-by-one-third-in-january-2015-01-05

http://www.ilga.gov/legislation/ilcs/ilcs4.asp?ActID=2104&ChapterID=60&SeqStart=3700000&SeqEnd=5000000