Estate Planning
The process of updating wills, trusts, beneficiary designations, and powers of attorney during and after divorce to reflect the changed marital status.
Understanding Estate Planning
Divorce necessitates a complete review of estate planning documents. During divorce, you should update your will to remove your spouse as beneficiary, change beneficiaries on life insurance, retirement accounts, and bank accounts, revoke powers of attorney granted to your spouse, and review any trusts. Many states automatically revoke an ex-spouse's inheritance rights upon divorce, but beneficiary designations on financial accounts typically override wills. Failing to update these documents can result in an ex-spouse inheriting assets or making medical decisions years after the divorce.
Real-World Examples
After the divorce is finalized, the husband updates his will, changes his 401(k) beneficiary from his ex-wife to his children, and revokes her power of attorney.
Related Terms
Any property or item of value owned by either or both spouses that is subject to division in a divorce. Assets include real estate, bank accounts, investments, retirement funds, businesses, and personal property.
DecreeThe final court order that officially ends a marriage. Also called a divorce decree, final judgment, or judgment of dissolution of marriage.
Exempt PropertyAssets that are protected from division in divorce because they are classified as separate property — typically pre-marital assets, inheritances, and personal gifts.
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This definition is provided for educational purposes only and does not constitute legal advice. Divorce laws and terminology may vary by state and jurisdiction.
Always consult a licensed attorney in your area for advice specific to your situation.