How to Handle Estate Planning After a Divorce

Divorce marks the end of one chapter and the beginning of another. While there are countless financial and personal matters to address after a divorce, one task that is often overlooked is updating your estate plan.

Many people assume that once the divorce decree is entered, everything is automatically taken care of. That is not always the case. Failing to review your estate planning documents can leave your former spouse with authority or benefits you never intended them to have.

Whether your divorce was finalized recently or several years ago, now is the time to review your estate plan and make sure it reflects your new circumstances.

Review Your Will or Trust

If you have a Last Will and Testament or a Revocable Living Trust, your first step should be reviewing those documents carefully.

Your former spouse may currently be named as:

• Personal Representative (Executor)
• Trustee
• Beneficiary
• Guardian for minor children, if applicable
• Holder of various powers or decision-making authority

Although Kansas and Missouri laws can automatically revoke certain provisions benefiting a former spouse after divorce, those laws have important exceptions and do not address every situation. It is far better to proactively update your documents than to rely on default statutes.

You can learn more about the applicable rules under Kansas law regarding spousal inheritance rights after divorce and Missouri law regarding divorce and provisions in a will.

Your estate plan should reflect the people you trust today, not the people who were part of your life in the past.

Update Your Powers of Attorney

One of the most important, and frequently forgotten, documents to update is your Durable Financial Power of Attorney.

This document gives someone authority to manage your finances if you become incapacitated. If your former spouse is still named as your agent, it is important to review the document and determine whether it should be revoked and replaced.

The same is true for your Health Care Power of Attorney and any HIPAA Authorization. These documents determine who can make medical decisions and access your health information if you are unable to do so yourself.

Kelley Law Firm provides additional information about the role of Powers of Attorney in estate planning.

Most divorced individuals prefer to appoint an adult child, sibling, parent, or trusted friend instead.

Review Beneficiary Designations

One of the biggest estate planning mistakes after divorce is forgetting about beneficiary designations.

Assets that commonly have beneficiaries include:

• Life insurance policies
• Retirement accounts (401(k)s and IRAs)
• Annuities
• Payable-on-Death (POD) bank accounts
• Transfer-on-Death (TOD) investment accounts

These beneficiary designations generally control who receives the asset regardless of what your will or trust says.

If your ex-spouse is still listed as the beneficiary, they may inherit those assets unless the designation is updated or applicable law provides otherwise. Reviewing every beneficiary designation should be part of your post-divorce checklist.

Retirement accounts deserve particular attention. The IRS recommends reviewing retirement plan beneficiary information after divorce and contacting the employer or plan administrator when changes are needed.

Consider Guardianship for Minor Children

If you have minor children, your divorce may change how you want guardianship provisions structured.

While your former spouse will typically remain the children’s natural parent, you should consider naming alternate guardians in the event both parents pass away.

You may also want to review any trusts established for your children’s inheritance and determine who should serve as trustee if assets are managed for them.

Review Your Trustee and Fiduciary Choices

Estate planning is not just about who receives your assets. It is also about who manages them.

If your former spouse was previously nominated to serve as:

• Trustee
• Executor or Personal Representative
• Agent under a Power of Attorney

you should consider whether someone else would now be a better choice.

Selecting a trusted family member, close friend, or professional fiduciary can help ensure your wishes are carried out effectively.

Don’t Forget About Your New Financial Picture

Divorce often changes your financial circumstances significantly.

You may now own different real estate, have new retirement accounts, receive maintenance, pay child support, or own assets individually that were previously marital property.

Your estate plan should account for these changes and ensure your assets pass according to your current wishes.

This is also a good opportunity to review tax planning, asset protection, and long-term planning goals.

Estate Planning Is Not “One and Done”

Many people create an estate plan and assume they are finished forever.

In reality, major life events, including divorce, marriage, the birth of children, significant changes in wealth, or the death of a loved one, should prompt a review of your plan.

Even if you already updated your documents shortly after your divorce, it is wise to review them every few years to ensure they still reflect your wishes and comply with current law.

Take the Next Step

If you have recently gone through a divorce, or if your divorce occurred years ago and you have never updated your estate plan, now is the perfect time to review your documents.

At Kelley Law Firm, we help individuals and families throughout Kansas and Missouri create estate plans that reflect their current goals, protect their loved ones, and provide peace of mind.

Our estate planning services include guidance on wills, trusts, powers of attorney, beneficiary planning, and other important components of a comprehensive estate plan. You can also explore all of Kelley Law Firm’s practice areas and legal services.

A simple review today can help prevent costly problems and unnecessary stress for your family in the future.

Ready to update your estate plan? Contact Kelley Law Firm today to schedule an Estate Planning Review. We will help ensure your plan reflects your life as it is today, not as it was before your divorce.