Leanna Hamill of the Massachusetts Estate Planning and Elder Law Blog has recently posted two useful and informative articles (Part 1 and Part 2) about Estate Planning and Divorce, which I have combined in this post:
If you are separated from your spouse, filing for divorce, or even just contemplating it – you need more than just a divorce attorney. You need to visit with an estate planning attorney to make some critical changes to your estate plan before and after the divorce. This post will deal with changes than can be made before the divorce, and the next post will be about changes to make after the divorce.
- If you have signed a health care proxy naming your spouse as the person to make medical decisions for you, you should revoke it and sign a new one appointing someone else. Notify your spouse that you have revoked the HCP naming them. Make sure that anyone who knows of the old HCP (such as your doctor) is given a new one. If you have not signed a HCP, sign one, and make sure your doctor has a copy and carry a card in your wallet indicating who your new health care agent is, and where your HCP is located.
- Remove your spouse from any Power of Attorney documents that you’ve signed appointing them and notify any entities that may have received a copy of the old Power of Attorney so they know it has been changed. The POA is a powerful document which can give the holder the right to access bank accounts that are in your name alone, get financial and sometimes medical information about you and even sell real estate that is your name. It is vital that you sign a new one if you do not want your spouse to have this power.
During this time you should also be thinking about your estate plan after your divorce. If you would not want your former spouse to be in charge of the money that you will leave to your minor children, you will need to set up a trust, with someone else as trustee. This can be a sibling, parent, friend or even a bank or other financial institution. Your estate planning attorney can explain what the responsibilities of the trustee are, so that you can make the best choice, and can help you determine when the best time to sign the new documents are.
You are nearing the end of your divorce, the final hearing or settlement is in sight. The last thing you want to do is hire another attorney, write another check out of your bank account which may have taken quite a hit during the divorce. But, you must. You need to see an estate planning attorney, to make sure that those things you fought for in the divorce are protected, and that your wishes are honored. And, rest assured, visits with an estate planning attorney do not involve any court visits, there are no "opposing parties" and generally estate planning attorneys do not charge by the hour.
You should meet with your estate planning attorney to form your plan before the final divorce hearing, so that the documents can be signed as soon as possible after the final hearing. This is because during the 90 days after the final hearing, you are still married, and if you pass away during this time without a new plan in place, your soon0-to-be-former spouse could inherit everything.
After your divorce, in addition to signing your new estate planning documents, you should also make sure that you have changed the beneficiaries on any life insurance policies, 401(k) plans, IRAs, and any other accounts that may have had your former spouse listed. If you have set up a trust, your estate planning attorney can assist you in making sure that the trust is properly named as the beneficiary of these accounts.