When a divorce is finalized, the last thing many individuals want to do is deal with more financial and legal issues. However, Florida residents going through a divorce shouldn’t close their files as soon as the process is complete. There can be estate planning considerations that could affect their desired beneficiaries.
One important document to review after a divorce is a will. Newly divorced individuals should either update an existing will or prepare a new one to take into account changed circumstances. Some states automatically void wills upon divorce, and thus a new will would be a necessity in that instance. In the absence of a will, state laws of intestacy would apply and could mandate distributions that were not in accord with the decedent’s intent.
Beneficiary designations are also important to review after a divorce. Accounts that usually have named beneficiaries include 401k plans, individual retirement accounts and life insurance policies. Beneficiary designations are not overridden by the provisions of a will, and thus even when the divorced spouse has prepared a new one it will not affect existing designations. There have been several instances in which individuals have inadvertently left money to their ex-spouse because they did not change the beneficiary designation on payable on death instruments after the divorce. When these cases have been contested, courts have tended to side with the named beneficiary on the account.
The effects of a divorce proceeding can outlast the issuance of the decree and can determine how a person’s assets are distributed many years later. An attorney with a background in estate administration may able to conduct a review of a client’s estate plan and determine which documents need to be revised.
Source: Forbes, “Divorcing Women: Don’t Forget To Update These Key Documents“, Jeff Landers, December 04, 2013