Estate planning isn’t something people like to think about, especially when going through a major life event like a divorce. However, your life can change in an instant. There is no way to know when you will pass away or if you will be incapacitated at any point. If that does happen, your loved ones can be put into a very difficult situation if they don’t know what to do when you become incapacitated or die. This is exactly why estate planning is important; if you have a plan, you can help your loved ones experience a far less difficult situation.
Every situation is different, and it is possible your estate plan won’t be complex. Consulting with an estate planning attorney will involve sensitive yet necessary discussions, and you should also learn the information necessary to help you make informed decisions. This is definitely something you should do when your divorce is concluded, as this life event will have an impact on your estate planning now and any plans you already had in place.
The Last Will and Testament
Your will is where you spell out where your belongings and other assets will go once you pass away. You will also be appointing someone to handle your estate in this document. If you already have a will, it’s very likely your soon-to-be ex is a beneficiary on it and possibly also the person named to handle the estate. Naturally, this is something that will need to change, so you will need a new will.
Funeral and Burial Instructions
Giving your loved ones instructions for your final arrangements and including how those costs will be paid can really help your loved ones have peace of mind during a tough time. It allows your loved ones to be certain they are honoring your final wishes. It will also help avoid disagreements among your family members regarding what you would have wanted.
Financial Power of Attorney
A power of attorney allows one person to conduct business–such as access a bank account or sign legal documents–on behalf of another person. Sometimes, people have power of attorneys made that only take effect if they become incapacitated. If you have a power of attorney already, it may give such powers to your spouse, so you will likely need to draft a new one and revoke or terminate the previous one.
Health Care Advance Directive
In New Mexico, you can appoint someone to make medical decisions for you should you become unable to make them on your own. As with other estate planning documents, you may have already executed one of these at a doctor’s office, and it likely gives this appointment to your spouse. Therefore, you will need to make a new one and terminate the existing one.
Life Insurance Policies
If you have life insurance, you will need to change the beneficiaries on your policies from your spouse to someone else. Before you do so, make sure your divorce does not include terms that state you must name a specific person as the beneficiary for part or all of an insurance policy’s proceeds. Check with your family law attorney if you are not sure whether you need to name your ex-spouse on any of your policies under the divorce terms.
Other Assets with Beneficiaries
Other assets, such as your retirement account, also usually have named beneficiaries. Depending on when you set these accounts up, your spouse may be named as the recipient. As with your life insurance, you can change the beneficiaries on these assets in accordance with your divorce settlement agreement.