If you are going through or already gone through a divorce, you know that it touched every part of your personal and financial life, but you may not realize that it also touched your estate plan. During the divorce, or immediately after, you need to update your estate plan to make sure that it reflects your current wishes.
The backbone of your estate plan is likely your will. As such, the first document that you need to review is your will. In Tennessee, unlike many other states, divorce revokes estate plan provisions that favor your soon-to-be ex-spouse. But, that does not mean that it automatically updates. It just means your estate plan will be thrown into chaos, should you neglect to update your will.
Make sure that your executor is still who you want to handle your affairs. If it is your soon-to-be ex-spouse or one of their family members, you may want to change that person. You will also need to name a guardian for your minor children, if you have not already done so.
Especially for high-income earners and later-in-life divorces, you likely have a trust as part of your estate plan. After all, they help you maximize your estate size by protecting assets and avoiding taxes and fees.
If the trust was created during the marriage, it likely will not reflect what you want anymore.
If it is a revocable trust, now is likely the time to change it. If it is an irrevocable trust, modifying it may be much more complicated as they are designed to make changes exceedingly difficult, if not impossible.
Financial power of attorney
If you have granted your soon-to-be ex-spouse or her children/family a financial power of attorney, you need to revoke it now, and choose a different person. Otherwise, your ex-spouse could get access to your assets after you pass. You should also notify your financial institutions and parties that have your old Power of Attorney of its revocation and give them the new one.
Your healthcare proxy empowers another to make medical decisions on your behalf when you are unable to make those decisions yourself. Chances are that the last thing you want is your ex-spouse making those decisions for you.
While a divorce is a prime time to update your estate plan, it should not be the only time you update it. Periodically review your estate plan to ensure it matches your current wishes.