by Erica Dobkowski
Working through a divorce can be a long and daunting task. A common reaction to trekking through the process is “I just want to get it over with.” From the initial petition, and even after the final decree, the to-do list can seem endless. While your attorney is working hard to protect and advocate for your interests, you have your own personal agenda that you are working through to make the adjustment to unmarried life.
But what about your estate plan?
If you had an estate plan with your former spouse while you were married, his or her name likely appears in most, if not all, of your documents. Whether you are in the process of getting a divorce or whether the divorce is final, it is probably safe to say that your previous documents no longer reflect your wishes.
Indiana law has some built-in protections against former spouses for estate plans created during a marriage, but not updated after a divorce. For example, provisions in favor of a former spouse in a Will are deemed revoked. The law has a similar protection for certain revocable trusts. If a former spouse was named in a Power of Attorney or in a Funeral Planning Declaration, those appointments are also deemed revoked. Additionally, Indiana provides that some payable on death (POD) or transfer on death (TOD) designations in favor of a former spouse are deemed revoked after a divorce, but keep in mind that this does not apply to certain assets, such as life insurance or retirement accounts.
While these protections can be valuable safeguards, this does not mean that you should disregard your estate plan. To the contrary, you should consult with an estate planning attorney as soon as possible. Regardless of whether you already have an estate plan, you will need an up-to-date plan that clearly and without question states what your wishes are upon your death or incapacity.
Below are four tips for those contemplating divorce, going through a divorce, or newly divorced:
- Consult. Talk with an estate planning attorney about updating or creating your estate plan. Bring copies of your most recent documents (if any). If you have a final dissolution decree, bring a copy of this as well so that the attorney can determine your share of the assets and liabilities and whether there are continuing obligations that need to be incorporated into your plan.
- Brainstorm. Set aside time to consider how your estate plan should look. Who should handle your financial or health care decisions? If you pass away, who should inherit your assets? Keep a list of similar thoughts and questions to bring to your attorney.
- Review. Check your assets to see how they are titled and, if applicable, who is named as beneficiary. While you were married, your spouse may have been listed as a beneficiary on your life insurance, retirement accounts, and other assets. It is also likely that some (or even all) of your assets were jointly titled during the marriage. While the titles and beneficiary designations should first comply with any requirements laid out in the dissolution decree, you should confirm that any remaining assets or designations are set up according to your wishes. Your estate planning attorney and financial planner will be able to help with this.
- Don’t Wait. As soon as divorce is on the table, make an appointment to speak with an estate planning attorney. If the divorce is pending, interim estate planning can be done as protection if something happens before the final decree is granted. If the divorce is final, your plan should be updated as soon as possible to reflect your new marital status and to update any beneficiaries and appointments. The longer you wait to square this away, the greater the chance is that something could happen without having the right plan in place.
We get it. Divorce is hard. While adding “update estate plan” to the priority list can be difficult with everything going on, it is imperative that you do not let your estate plan fall on the back burner during such a life-changing event. Take steps now to protect yourself, your assets, and your loved ones – Contact Mallor | Grodner LLP’s estate planning team today to get started.