Divorce is a life-changing event that affects not only your financial and personal life but also your estate plan. Many individuals in Utah overlook the importance of updating their estate planning documents during divorce proceedings, leaving them vulnerable to unintended consequences. Reviewing and revising your estate plan is a critical step to ensure that your wishes are reflected accurately and that your assets are protected as you transition into this new phase of life.
One of the most important documents to review during a divorce is your last will and testament. Many married individuals name their spouse as the primary beneficiary and executor of their will, but during a divorce, you may want to reconsider these choices. While Utah law may revoke certain spousal designations upon finalization of the divorce, it is still essential to update your will proactively to ensure that your estate is distributed according to your wishes. If you fail to make changes, your ex-spouse could unintentionally inherit assets or have control over your estate if you pass away before the divorce is finalized.
Your powers of attorney should also be updated during divorce proceedings. A financial power of attorney gives someone authority to make financial decisions on your behalf, and a healthcare power of attorney allows someone to make medical decisions for you if you become incapacitated. If your soon-to-be ex-spouse is listed in these roles, you may want to revoke and replace these designations with a trusted family member or friend. Failing to update these documents could result in your ex-spouse maintaining legal authority over important financial and healthcare matters.
Another critical component of your estate plan is your beneficiary designations. Many assets, such as life insurance policies, retirement accounts, and investment accounts, are distributed based on beneficiary designations rather than your will. If your ex-spouse is still listed as the beneficiary on these accounts, they may still receive these funds after your passing, regardless of what your updated will states. To prevent this, review and update your beneficiary designations to ensure they align with your current wishes.
Trusts should also be evaluated during divorce proceedings, particularly if you and your spouse created a joint trust. In Utah, a revocable living trust can often be amended or revoked, but it is essential to work with an attorney to ensure that your trust is updated correctly. If you have children, you may also need to create a new trust to ensure that their inheritance is protected and not subject to control by your former spouse.
Divorce is a complex process that requires careful legal and financial planning. Updating your estate plan ensures that your assets are protected, your wishes are honored, and your loved ones are provided for appropriately. Failing to update these documents can lead to unintended consequences that could impact your financial future and your family’s well-being.
We know this blog may raise more questions than it answers. If you are going through a divorce and need assistance updating your estate plan, contact our firm today to ensure your legal and financial interests are fully protected.