Divorce is a difficult process, no matter how amicable the split. Between property division, potential custody disputes, and escalating legal bills, no one wants to think about more legal hoops to jump through. While updating your estate plan during a divorce may be the last thing on your mind, a failure to do so could lead to unintended results. These five tips will help you keep your estate plan in order during the divorce and after the issuance of a final divorce decree.
- Update your will/trust to remove outdated provisions. Your will and/or trust likely directed most or all of your estate to your surviving spouse during your marriage. Fortunately, in both Minnesota and Wisconsin, if you die after your divorce is finalized and you do not update your estate plan, all provisions in favor of the former spouse are automatically and fully revoked and the ex-spouse is treated as if he or she predeceased you. On the other hand, if you die before the Court issues a final divorce decree, your spouse may receive benefit from your estate, despite your separation and contrary intentions. Of note, while you are free to make your intentions known in your will/trust by disinheriting an estranged spouse, if you are still married at the time of your death, under Minnesota and Wisconsin law, he or she may still be entitled to a statutory share of your estate. Take the mystery out of your estate plan and update your will/trust to remove outdated provisions.
- Change your personal representative/trustee to someone other than your estranged spouse. If you hate the thought of leaving anything to an estranged spouse, you are probably equally opposed to leaving them in charge of your estate. Again, if your divorce is finalized, both Minnesota and Wisconsin law revoke any appointment of an ex-spouse as personal representative/trustee. However, if your divorce is not finalized, this can raise some unpleasant ambiguities that can easily be avoided through an update to your plan.
- Update guardian appointments for minor children. For young families, the primary motivation in creating an estate plan is the opportunity to appoint a guardian for minor children. If you die during or after your divorce, your former spouse will almost certainly continue to raise your children, no matter who you appoint as guardian in your will. However, in the unlikely event that both you and your former spouse die, at the very least, your will can provide guidance with respect to your choice of guardian.
- Revoke and update your powers of attorney and health care directives. In Minnesota and Wisconsin, any power of attorney or health care directive executed by one spouse in favor of another spouse is automatically revoked upon commencement of divorce proceedings. In order to avoid any confusion, it is always wise to update your power of attorney and health care directive as soon as you file for divorce.
- Update your Beneficiary Designations. You should also change the beneficiary designations on life insurance policies, retirement accounts, annuities and other investments where applicable. In all likelihood, if you are in the middle of a divorce, you will be prohibited from making these changes until after the divorce is finalized.
If you have questions regarding your estate plan, please contact Jesse Beier at 612.336.9339 or firstname.lastname@example.org.