- posted: May 23, 2023
- Estate Planning
Divorce is a life-changing event that can significantly impact your personal finances. Several of the estate planning decisions you made while married may no longer serve your purposes and intentions. Reviewing and updating your estate plan is essential to ensuring that your assets are protected and will be distributed according to your wishes.
Your chief priority in revising your estate plan after divorce should be to check your will. Many married people make their spouse their chief or sole beneficiary and their executor, which gives the surviving spouse control over the estate. In Arizona, a divorce invalidates the surviving spouse’s right to share in your estate or to serve as executor. Any bequest made to him or her will therefore lapse unless an alternative beneficiary has been named. The best course of action is to revoke the existing will and to create a new one, designating a new executor and beneficiaries.
A divorce is also a good opportunity to set up a living trust, which allows you to keeping control of your property during your lifetime while providing for children and other beneficiaries upon your death. The trust can name a successor trustee to manage its assets and make distributions as you have directed. The main benefit of a living trust is that the property does not have to go through the probate process.
Not all of your estate property passes through your will upon your death. For many assets, such as retirement accounts, life insurance policies and pay-on-death bank accounts, there are named beneficiaries who will receive their benefits automatically. Some of these assets might have been split up in the divorce. For any remaining ones, you may wish to remove any designation of your spouse as beneficiary and to name a substitute.
You should revoke any power of attorney you have given your spouse, whether for medical or financial decisions. A POA generally takes effect if and when you become incapacitated. You may not wish your former spouse to have the authority to make critical and sometimes life-or-death decisions.
There are numerous details to changing your estate plan after a divorce, including possible tax implications. An experienced Arizona estate planning attorney can guide you through the choices available.
The Law Firm of Joseph M. Udall, PLC in Mesa represents Arizona residents in all aspects of estate planning. Call (480) 500-1866 or contact us online. We provide telephone consultations, and Saturday and evening appointments are available.