A large part of what estate planning is is putting together contingencies in case of certain life events. Usually when we talk about life events in relation to an estate plan, it means death, the birth of a child, or a dramatic change in the relationship you share with one of your heirs. However, there is another life event that has a huge impact on estate plans and even though this event and estate plans are inexplicably tied, the correlation isn’t discussed as often as you might think.
What we’re talking about is divorce.
When a couple files for divorce, there are many things that each couple has to deal with. Their estate plans should not be one of the elements that gets pushed to the bottom of their list of priorities. You have to update your estate plan, and quickly, in the wake of a divorce.
You likely have many assets and bits of inheritance that are tied to your husband or wife, and understandably so. But when the two of you decide that you don’t want to spend the rest of your lives together, your estate plan needs an immediate update so that your assets will go to the necessary parties should your estate plan kick in.
This is also a good time to remind everyone to update your estate plans on a regular basis, whether a divorce is involved or not. Every year or two, you should look over your estate plans and make sure their contents align with what you’re thinking.
Source: Wall Street Journal, “Three Common Estate-Planning Mistakes,” George Papadopoulos, Jan. 7, 2015
