Divorced spouses may be gone, but are often not forgotten. In fact, after a divorce, one of the most important steps you can take is to review and revise your estate plan. A long time ago (too long for me to comfortably count the years), I was primarily focused on divorce law. When the divorce was finalized, my clients were often left to wonder,
Some of them had businesses that they had run with their spouses. Now they were the only ones in the business and weren’t sure what the next steps were. Others were in the process of cleaning up their financial lives. Being divorced can really wreak havoc on your finances. And in the process of reviewing their finances, they realize that their old will left everything to their spouse. Or they realize they didn’t have a will at all. Technically, I think the worst one I remember was a client who thought she had a will, only to find that it was prepared by her ex-husband on a website and it wasn’t executed properly and would have been found to be invalid if she had died.
Do I Need to Worry About My Ex Inheriting From Me?
In Minnesota, when you get divorced, your ex-spouse is automatically removed as a beneficiary under certain assets like life insurance policies (but there are exceptions) and trust agreements. More importantly, your ex is revoked from your estate as a personal representative, guardian, conservator, trustee or agent. So, it seems like there’s not much to worry about?
There are assets where the revocation is not automatic. They may include,
- Some qualified and non-qualified retirement plans;
- Social Security benefits (under certain circumstances); and
- ERISA life insurance policies.
Using beneficiary designations for your estate plan is a powerful and easy tool. However, with that power comes the responsibility to make sure that you keep your beneficiary designations up to date. Have you checked yours recently? It often takes 5 minutes (or less if you can pull it up on your phone or tablet). Those minutes can save your loved ones an immense amount of drama and paperwork.
If you work with a financial advisor, they probably know you need to update your designations if you’re divorced. And if they don’t know that, well, you may need to find a new financial advisor. But talk to your advisors after a divorce and make sure your financial and estate plans are updated. What worked for you as a married couple rarely makes sense for you as a single person (or a parent now raising children on their own).
If you haven’t checked your estate plan and beneficiary designations since your divorce then now is the perfect time to do it. Call my office to set up a legal strategy session and we can review the best options for you – (877) AMAYERS.