When going through a divorce there are many variables that must be addressed; do you stay in the home, do you sell assets, do you purchase assets, are you going to be able to negotiate an agreement or will this matter be hotly contested. One of the more overlooked aspects of the divorce process is preparing your estate for the unknown.
The following are common mistakes made during the divorce process and how to fix them:
- Failing to update, or have in place, a power of attorney and advanced medical directive. If you do not have these documents in place, your spouse can make decisions until you are officially divorced, which may take over a year.
- During this time, you want to create a power of attorney and assign that role to a trusted family member; a sibling or parent would be best. You will also want to create an advanced medical directive that lays out exactly what you want to happen in case you become ill and are not able to communicate your wishes. Even if you are temporarily unconscious, or under anesthesia, your agent can step in and make decisions on your behalf.
- You do not have a will or have not updated your will. If you do not have a will, your spouse may get 100% of your estate if something happens to you during your divorce.
- It is important to update your overall estate plan in order to direct your assets away from your soon to be ex-spouse. You can use beneficiary designations, revocable trust, and other estate planning tools to limit the potential exposure of your estate assets.
- After the divorce is finalized, it is important to revisit your estate planning to ensure it fits in line with your goals. If you want to leave assets to a minor child, you’ll need to have a structure in place to ensure they receive the benefit you want without the risk of control by your ex-spouse.
- Failing to update beneficiary designations on bank accounts or life insurance claims.
- If you have not set your beneficiary designations and something happens to you; the assets will be subject to your estate and your spouse will potentially inherit 100%
- Beneficiary designations are some of the most important elements of your estate plan, and can make a huge difference in the cost and time involved in probate. Make sure to review your options with a trusted financial advisor and estate planning attorney.
If you haven’t considered the impact of your divorce case on your estate plan, it’s essential to speak with a family and estate attorney who can advise you of your options. Make a plan today by consulting with our office in Reston 703-995-9900 or Virginia Beach 757-296-0580, or schedule a consultation online.