Divorce can certainly be one of the most stressful times in our lives. Often, issues such as property division and child custody take precedence over other matters. However, once the dust has settled, there is one crucial step to take — update your estate plan to ensure your ex-spouse has as much or as little control over your affairs as you would like when the need arises. Why should you update your estate plan after a divorce? While Arizona law provides some protection by automatically revoking some provisions regarding an ex-spouse in certain circumstances, the easiest way to gain clarity and certainty in these situations is to simply update your estate plan with your attorney. From wills and trusts to powers of attorney, life insurance policies, and retirement accounts, let’s explore why these documents must be updated after a divorce (dissolution of marriage or even a legal separation):
Update your Will and Trust
Most likely, there are provisions in your will and/or trust that leave money or belongings to your ex-spouse this is why you should update your estate plan after a divorce. It is also likely they are named an executor under your will or a trustee under your trust. All of these provisions will need to be addressed and updated once your divorce has been finalized to ensure your new wishes can be carried out. We can help you amend a current trust or create a new one to address these issues, and we can also help you revoke your old will and execute a new one.
Get Your Powers of Attorney In Order
If you have financial or health care powers of attorney, it is likely that your ex-spouse was given the authority to act as your agent under these powers which is why you should update your estate plan after a divorce. While Arizona law automatically revokes any authority your ex-spouse may have had as your agent, you may be left without any agent at all if you didn’t name a successor agent in the original document. We can help you create new powers of attorney to ensure someone else you trust can step into this role when the need arises.
Check your Beneficiaries on Your Life Insurance and Retirement Accounts
People often forget about the beneficiary designations they have on life insurance policies, retirement accounts, and the like, but it is absolutely necessary to update these designations. Do you want your ex spouse to be your beneficiary? If not, this is a potentially major issue and why you should update your estate plan after a divorce. While Arizona law automatically revokes beneficiary designations in favor of an ex-spouse for life insurance policies, federal law (ERISA) preempts state law with regard to employee benefits and retirement accounts. This means that your ex-spouse will remain a beneficiary on these accounts until you change the beneficiary, even after a divorce.
Why Should You Update Your Estate Plan After a Divorce — Concluding Thoughts
As you can see, divorce raises a number of different issues in terms of your estate plan. Arizona’s automatic revocation laws really only provide a safety net to protect you until you can talk with your lawyer and get your estate plan updated. If you are going through a divorce or have recently had a divorce finalized, contact us today to review your estate plan and see how we can help!
By: Colton Powell