Divorce, while marking the end of a marital chapter, also heralds the beginning of a new phase of personal and financial independence.
Among the myriad decisions to navigate during this transitional time, there’s one crucial task that often goes overlooked: updating your estate plan.
Whether you’ve just finalized an agreed divorce in Texas or are in the process of doing so, understanding the importance of revising your estate planning documents cannot be overstated. Our Texas estate planning attorneys at Coker, Robb & Cannon assist our divorce clients in planning for, and executing, revised estate plans during and after their divorce. Here are a few tips:
The Legal Implications of Not Updating Your Estate Plan
In the state of Texas, divorce can significantly affect the validity of certain elements of your estate plan. For instance, Texas law automatically revokes any bequests to your ex-spouse in a Will upon divorce.
While this is probably the desired effect for most people post-divorce, it might not be for everyone. If it’s not, you will need to update or republish your Will so that it is clear you want to keep your ex-spouse as a beneficiary.
More often, many of our clients at Coker, Robb & Cannon have Wills that leave everything to their “now ex” spouse and they no longer want that person to receive anything. Even though Texas law may automatically remove an ex-spouse from an estate plan, it still adds complexity that could delay the probate process or have other serious and unintended consequences, such as accidental disinheritances due to the laws of intestacy or due to terms in a divorce decree clashing with your pre-divorce Will. If you overlook updating your estate plan after a divorce, you may just be leaving your loved ones with a huge mess to solve.
Further, this automatic revocation may not extend to all other crucial estate planning documents such as life insurance policies, retirement accounts, and powers of attorney, where your ex-spouse could still be the named beneficiary or agent unless you make necessary changes.
Key Estate Planning Documents to Update Post-Divorce
Will and Trusts: These documents dictate how your assets are distributed upon your death. Post-divorce, it’s essential to review and possibly alter the beneficiaries, especially if your ex-spouse was initially the primary beneficiary or executor.
Durable Power of Attorney: This grants someone the authority to make financial decisions on your behalf. If your ex-spouse was designated as your agent, you should definitely consider appointing a new trusted individual.
Medical Power of Attorney: Similar to the durable power of attorney, but for medical decisions. Updating this document ensures that the person making critical health care decisions for you is someone you currently trust implicitly.
For both Powers of Attorney, many people often do not even list an alternate to their spouse, meaning that post-divorce, the document may have unintended consequences or be of little or no use at all.
Beneficiary Designations: Life insurance policies, retirement accounts, and some financial accounts allow you to name a beneficiary directly. Review and update these designations as they may not automatically change with a divorce.
Guardianship Designations: If you have minor children, it’s critical to review and potentially revise your chosen guardians in the event of your incapacity or death, particularly if your ex-spouse is unable to care for them.
The Emotional and Financial Peace of Mind
Updating your estate plan post-divorce is not just a legal necessity; it’s a step towards gaining emotional and financial peace of mind.
It allows you to ensure that your assets and children will be taken care of according to your wishes and that the individuals you trust today are the ones making decisions on your behalf if you’re unable to do so.
Next Steps
Begin by gathering all your current estate planning documents and reviewing each one to identify changes needed. Consider consulting with a Texas estate planning attorney who understands the nuances of estate planning within the context of divorce. Our estate planning attorneys at Coker, Robb & Cannon regularly help our clients all across the state of Texas with these types of decisions. They can provide guidance tailored to your unique situation, ensuring that your estate plan aligns with your current life circumstances and future goals.
Remember, updating your estate plan post-divorce is not just about separating your life from your ex-spouse’s; it’s about taking control of your future and the legacy you choose to leave.