Marriages bring with them a whole host of rights that spouses earn. It should come as no surprise that getting a divorce terminates many of these rights, and a married couple going through a divorce should make sure to update their estate plans to reflect the change in marital status. Here are three of the most important estate planning areas a divorcing couple needs to address during or after the divorce.
Area 1: Updating guardian choices.
Each parent has the right to name their choice for a replacement guardian for their minor children if the parent should die or become incapacitated. Normally, married couples make the same choice of guardian by naming the choice in their wills. However, divorcing couples may choose to name different guardians, posing a potential problem if the other parent does not approve of the choice. Selecting guardians that both spouses approve of can be an important step to take, and one that is often best done during the divorce process.
Area 2: Updating beneficiaries.
It’s common for married couples to name one another as their beneficiary for life insurance policies, retirement accounts, and other inherit on death accounts. Couples should develop a list of assets that name the spouse as beneficiary and be sure to select someone new as soon as the divorce is complete.
Area 3: Incapacity planning.
As soon as a couple decides to divorce or separate, they should take steps to ensure they choose someone other than each other in the event either person becomes incapacitated. The couple should modify powers of attorney or medical directives, naming someone new to take over decision making rights.