The beautiful thing about creating an estate plan is that you can change it at any time. And estate planning attorney Samuel B. Ledwitz wants you to realize an important time to change your trust is when you’ve just gone through a divorce.
Ledwitz, who is the founding partner of Bezaire, Ledwitz and Associates, an estate planning law firm, said that since you just divorced your spouse, your ideas about who should be inheriting your assets will probably have changed.
“A lot of times, a couple will have drawn up a beautiful estate plan, thinking it will last forever,” he said. “But then life happens and divorce occurs. In California, the divorce rate is nearing up to 50 percent. So, this is happening to quite a lot of people. Hopefully, this won’t affect you. But what happens on the family law side does affect what you do on the estate planning side.”
So, what are some of the areas of estate planning you should look at if you find yourself in this somewhat common situation? Ledwitz has some ideas.
“There are several things you should look at regarding your estate plans upon getting a divorce,” he said. “You should review your retirement plans to see who the beneficiary is. You should review who your life insurance beneficiaries are. You should review other beneficiaries, like do you own joint tenancy with this person?”
He added that many people wait until it’s too late to fix what is a very fixable problem.
“Can you imagine you just went through a divorce that cost you $10K or $15K with your now former spouse, and if you happen to die they still get everything because you didn’t do anything to change your beneficiaries?” Ledwitz said. “It could be now that you are divorced you don’t want that person to inherit anything. If that’s the case, you really need to make an appointment to see a qualified estate planning professional.”
Another area Ledwitz suggests you look at is creating a new living trust, as any old trust containing references to your ex-spouse might now be out of date.
“Any existing trust with your former spouse needs to be revoked because it’s not deemed to be valid anymore,” he said. “Don’t fool yourself into thinking you still have a trust. You need a new one. You should be asked, where do you want your assets to go in light of your new situation? What do you want for your kids? Who should manage the money you’re leaving for your kids? If
you don’t trust your ex-spouse with the money, who would you trust to manage the funds for your kids? These are all things that need to be addressed under your new situation.”
Other forms that need to be updated, Ledwitz said, include power of attorney and medical privacy forms.