What You Need To Know & Do Before Getting A Divorce

You might think that dealing with one legal problem at a time is a good plan to have, and combining estate planning with a self-directed divorce may seem like a difficult proposition; however, by making a plan regarding your estate before and during your divorce, you can make sure you’ll have better financial protection for yourself and your heirs. 

Steps to Take if You Already Have An Estate Plan 

If you and/or your spouse found time to make estate plans at before or during your marriage, then you'll more than likely want to go over some of those decisions in the case that your marital status changes.

This section will provide a list of documents and accounts you will want to look over before you file for or finalize a divorce and what actions you should think about taking. 

Payable-on-Death Accounts 

One of the first things to focus on, if divorce seems likely, are your payable-on-death accounts. Most checking, savings, investment and even retirement accounts will let you bypass formal probate processes by assigning a beneficiary (or beneficiaries) directly to the account.

You can usually do this by filling out a form with the financial institution that holds the account, usually when you first open the account. In such cases, the assets in the account will automatically transfer to the named beneficiary — without the need for probate — when a death certificate and any account-specific forms are presented. 

Most people will name their spouse as the primary beneficiary on such accounts, so if you're filing for divorce and don't want your ex-spouse to be named as the beneficiary, reach out to each financial institution. As long as you are the sole account holder, it's generally quite easy to change beneficiaries, and your bank or investment company can give you the forms to do so. 

Life Insurance Policies

Life insurance policies are also payable on death, following the requirements of each policy. If you own a life insurance policy on yourself with your spouse as the beneficiary, you can generally change the delegation whenever. Talk to your insurance agent or check out your insurance company's online forms library for a change-of-beneficiary document. 

Wills

Most couples usually manage estate planning matters together, and many even have a commingled will. If you have never made a will, made one with your spouse or made your spouse a primary beneficiary of your assets, you might want to draw up a new will upon divorce.

While estate law in most states can make it hard to write a spouse out of your will, writing out an ex-spouse isn’t the same and any valid will with a more recent date will replace any previous documents.

Trusts

Trusts aren't always as easy to change as other estate plans, and some are even irrevocable. Whether or not you can take assets out of a trust relies upon on how you set it up, and the same for changing rules or beneficiaries of the trust. While many of your pre-divorce estate planning tasks can be taken care of with DIY forms and some help from a financial institution or two, if you have to deal with trusts, you may want to talk to a professional estate planning attorney. 

Power of Attorney 

Now finally, if you have signed a form providing your spouse with the power to make decisions over your finances, health care or other matters, ensure you file documents revoking that power if needed. Some common power of attorney (POA) forms include health care proxies, which will give someone else the ability to talk to medical providers and make decisions on your behalf if you're unable to. Other POA documents will allow someone to access your financial records or handle money matters for you.

In some rare divorce situations, some people might be comfortable leaving their ex to be in control of such things; however, if that's not something you feel comfortable with — and it's an absolutely reasonable stance to take — consider picking someone else to appoint in these roles for emergency situations. 

Agreeing on Estate Matters Related to Children 

If you're figuring out an online divorce together, you and your soon-to-be ex-spouse might also want to consider coming together on a few other legal matters. In some cases, you can even make follow-through on these agreements mandatory by including them in the divorce.

This is especially important if you have children together; you should ask yourself: How do you want the kids to be cared for if something happens to one of you? And what if something should happen to both of you?

Some things to consider include: 

• Legal or written agreements to make sure family members on both sides, such as grandparents, aunts and uncles, are able to maintain good relationships with the kids 
• Who you want to be guardian over the children in case something happens to both parents 
• Whether you can work together to set up trusts to benefit the kids for their future 

If you're worried about support for your children after you're gone and don't trust your ex-spouse to handle any funds you might leave behind, then you are able to set up a trust and choose an administrator.

For example, you might create a trust meant to provide for your children or help with their education and make your sibling the administrator should anything happen to you. 

Estate Planning After Divorce 

Once the divorce is finalized and all property is fairly split, your estate planning decisions become your own business. If you've done the work ahead of time to change beneficiaries and create a new will, then you shouldn’t need to worry too much about estate plans related to your previous marriage. Now you can move forward in life, focusing on your own future. 

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