For most Colorado couples, divorce is a detailed and complicated process. There are many factors to consider, such as how assets will be split and where the children will live. During this often-stressful time, it’s imperative that you don’t neglect your estate plan. Forgetting to make changes to your estate plan after a divorce can prove disastrous for your family.
Divorce estate planning should always be a part of the divorce process. Whether you’ve never executed an estate plan, never revised yours after getting married, or always let your spouse manage your current plan, now is the time to hire a Colorado estate planning attorney who can help ensure you take the necessary estate planning steps during and after your divorce.
Your Will
If you already had a will with your ex-spouse, the easiest way to modify it is to revoke the old one and write a new one. To revoke an old will, you have two options; destroy it (shred or burn it) or state in your new will that you are rescinding all previously executed wills.
In Colorado, if you drafted a will before getting divorced, any gift designated to your spouse in your will is automatically revoked upon your divorce. While this safety net has saved many estates from having to fork over assets to ex-spouses, it doesn’t provide an alternative gift receiver. If you take no action, that gift will go to either an alternative or residuary beneficiary, which might not be what you desire.
You can take control of this situation by making a new will reflecting your current desires. Your new will should include the following:
The people or parties you want to receive your property
The new individual you want to be the executor of your estate since your current will likely designates your now ex-spouse
The individual you want to be the guardian of your minor children
Keep in mind, however, that if you die while your ex-spouse is still living, they will probably receive sole custody of your minor children. Only if both parents die or the living parent is found unfit will a judge appoint a guardian per your will.
Courts aren’t required to honor a guardianship choice, but they often do so. So, if you currently have custody of your children and don’t want their other parent to have custody if you die before them, detail the reasons why in writing and attach it to your will. The judge will consider those reasons.
Beneficiary Designations
Your ex-spouse is most likely the designated beneficiary on your bank and other financial accounts, life insurance policies, and possibly on real estate and motor vehicles. Upon receiving your final divorce decree, you will need to remember to designate a new beneficiary.
For instance, if you are setting up a new living trust, you might want to name the trust as the beneficiary, especially if you have minor children. Otherwise, a minor beneficiary requires a guardian, and possibly against your wishes, the court may pick your ex-spouse to be their guardian in this matter.
Usually, retirement accounts (like 401(k)s, 403(b)s, IRAs, and pensions) are marital assets and are therefore divided between the two spouses in a divorce. Divorce judgments frequently dictate what, if any, modifications you can make to the beneficiary of these accounts.
Typically, you must get the applicable forms from your brokerage firm, financial institutions, or employer to make beneficiary changes.
Financial Powers of Attorney
Financial power of attorney provides a designated individual broad financial powers, such as to sell your assets and withdraw money from your financial accounts. Suppose you previously elected your spouse as your financial power of attorney. In that case, it’s in your best interest to draft a document revoking the power of attorney and give all your financial institutions a copy immediately. You can and should do this even if your divorce is yet to be finalized. You can always execute a new power of attorney by appointing someone else as your agent.
Healthcare Power of Attorney
Similarly, your estate planning might have included appointing a healthcare power of attorney (a.k.a. designation of patient advocate, an advance directive, or healthcare surrogate). If so, you most likely selected your spouse to make your medical decisions if you were to become unable to do so.
You can revoke the document or execute a new document designating someone else as your healthcare power of attorney while your divorce is pending or once it is final. Be sure to also notify your regular healthcare providers of such a change.
Other Estate Plans
In addition, it’s imperative to consider other estate plans that might include your ex-spouse. For example, suppose your parents or other relatives have their own estate plans that designate you and your spouse as beneficiaries. In that case, they should also review their plan during or after your divorce. They might need to redraft their estate planning documents to exclude your ex-spouse from receiving any of their assets upon their death.
Other Estate Planning Considerations for Divorce
Any property attached to a title document, including real estate, motor vehicles, and boats, will need its title changed to show you or your ex-spouse as the new sole owner after your divorce.
While not extremely common, some divorced couples stay good friends and have a trustworthy relationship regarding certain matters. If this describes your relationship with your ex, you still have the right and ability to:
Leave a gift to them in your will
Designate them as your beneficiary or agent in a power of attorney
Request them as the custodian of your minor children if you die
Contact Ball and Barry Law Today for Your Divorce Estate Planning Needs
Don’t forget that estate planning is essential to the divorce process. Failing to update your estate plan during or after a divorce can have serious consequences for your family members. Call Ball & Barry Law today at (720) 439-2530 or contact us online for help with your post-divorce estate plan.