One of the most important times for you to review, or begin creating, your estate plan is when you go through a change in marital status. A divorced person has distinctly different estate planning concerns than a married person, and your estate plan needs to take these differences into account as soon as possible. Here are three common estate planning issues that divorced or divorcing people need to address.
Issue 1: No more spousal share.
All states have laws that give each spouse the right to inherit from the other upon the other’s death. How much each spouse is entitled to differs by state, but regardless of the state, this right terminates upon divorce. For couples who have created a will, it’s important to modify the will after the divorce to take account of the no longer existent spousal share.
Issue 2: Guardians.
A divorcing couple may have used a will to name guardians who will take over the parenting responsibilities if the parents die. If the couple can still agree to keep the same guardian in their wills, this shouldn’t be a problem. However, if the split is contentious, each parent may end up choosing a different guardian, one that the other may not approve of. If possible, it’s best for the couple to agree to the same guardian choices during the divorce settlement process.
Issue 3: Advance directives.
Spouses generally have the right to make medical decisions on behalf of an incapacitated spouse unless the incapacitated spouse chooses someone else through an advance medical directive. Upon divorce, spouses lose the right to make medical choices for each other. To give someone else the right to make these choices, you’ll have to create an advance directive.