How to Revise Your Estate Plan After a Divorce in Florida
Divorce can be a devastating event for your emotional health and your financial well-being. What newly divorced couples tend to forget, however, is the impact of divorce on estate planning.
Your estate plan dictates how your estate is distributed upon your death. If your plan designates a former spouse as your beneficiary after your divorce is finalized, you leave the door wide open for your ex-spouse to inherit your property and assets.
3 Steps for Revising Your Estate Plan After Divorce
Revise your estate plan as soon as your divorce is finalized. To get started, follow these three steps.
Step 1: Tear Up Your Existing Will and Create a New One
Start by getting out your paper shredder and shredding your will. Shred the original and any copies you have. Then, delete any digital copies that may exist.
Now, it’s time to start fresh and create a new will. Your will should clearly define the following.
- The new owner(s) of your property
- The executor (In Florida, that person is called a personal representative) in charge of handling your estate
- The guardian who will care for your young children, if necessary
Beneficiary of Your Property
Most married couples name one another as their beneficiary. So, for most divorcing couples, revising their beneficiary on their life insurance, 401k, and similar financial contracts, is a normal step in the divorce process.
Once your divorce is finalized and your spouse is removed as your estate beneficiary, you’ll need to contact your benefits manager, bank and insurance company about designated a new beneficiary. It’s just as important to name a new beneficiary as it is to remove an old one.
If you don’t have a will, the law dictates that your estate be inherited by your closest living relative blood relatives, regardless of your wishes.
Personal Representative of Your Estate
Most married couples list their spouse as their personal representative. If you’re one of them, this is another change you’ll need to make during the divorce process.
Note: Florida law does not remove a spouse as your personal representative after a final judgment of divorce is entered by the Judge. That’s another reason why it’s best to make a proactive decision and change your will to name a new personal representative as soon as possible.
Guardian of Your Children
Naming a guardian for your young children is perhaps the most important reason to have a will that is up-to-date and reflective of your current wishes. If you are your children’s only living parent, naming a guardian is even more important. If your ex-spouse is living upon your death, your children will go to be raised by him or her.
There are cases, however, where a parent doesn’t want their children being raised by the other parent. Unless your ex-spouse is unfit to parent, you most likely won’t have a choice in the matter. But, if you feel it necessary, speak with your lawyer. A divorce attorney can help you draft a list of reasons why you believe your ex-spouse is unfit to parent and include it along with your revised will.
Step 2: Update the Beneficiary on Assets That Pass Outside Your Will
Some of your most valuable assets will fall outside of the parameters of your will and your will’s named beneficiary. Any accounts or policies that assign your ex-spouse as the beneficiary will need to also be changed during the divorce process.
The most common assets that fall outside of your will include:
- Investment accounts, including retirement accounts
- Life insurance policies
- Pay-on-death bank accounts
- Transfer-on-death brokerage accounts
When it comes to these out-of-will assets, your ex-spouse won’t automatically be removed as the beneficiary with a final divorce decree.
Retirement accounts like a 401(k), in particular, do not follow these same state laws and will not remove a beneficiary from an account unless a request is made to do so. These so-called qualified plans adhere to the federal law ERISA – Employee Retirement Income Security Act.
ERISA requires that your funds go to the beneficiary, even if that beneficiary is your ex-spouse. So, once your divorce is finalized, update your beneficiary on all qualified plans that adhere to federal rather than state laws.
Step 3: Name a New Power of Attorney
Like with estate plans and assets that pass outside of the will, most married couples name one another as their power of attorney. A power of attorney gives the individual you choose the authority to make healthcare and financial decisions on your behalf.
Your will should outline a power of attorney for medical decisions and one for financial decisions. By removing your ex-spouse from the equation, you can opt to name one person to both responsibilities, or choose separate power of attorney for medical versus financial decisions.
Work with A Florida Divorce Lawyer to Revise Your Estate Plan After Your Divorce
Determine the individuals who will replace your ex-spouse as beneficiaries in your will and asset accounts, and who will serve as your power of attorney. Then, have a Florida divorce lawyer update your will and formalize your new estate plan.
Contact us today for a free case evaluation. We’ll listen to your case and explain your rights. When you’re ready to work with an experienced family law attorney to revise your estate plan, please fill out the form on our Contact Us page or give us a call at (954) 880-1302.