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Going through a divorce is undoubtedly a difficult time, filled with emotional upheaval and significant life changes. Amidst all the stress and uncertainty, it's crucial not to overlook an important aspect: your estate plan.
The Importance of Revising Your Estate Plan
When you're married, many of your assets are likely intertwined with your spouse's, and your estate plan reflects that. However, your financial picture changes dramatically when you decide to part ways. If you don't update your estate plan, your soon-to-be ex-spouse might still be entitled to a significant portion of your property upon your death.
Moreover, your spouse may currently be your healthcare proxy or have power of attorney. If your relationship has ended, you probably don't want them to make critical decisions on your behalf anymore.
The Optimal Timing for Changing Your Estate Plan
The best time to revise your estate plan depends on your situation. However, as a general rule, starting the process as soon as you know divorce is imminent is wise. Changes can be made any time before the divorce is final, but some modifications may be necessary afterward, depending on the divorce settlement.
Practical Steps to Navigate the Process
Here are some practical steps to help you navigate this challenging process:
- Update Your Will and Trusts: Exclude your spouse from these documents unless you want them to inherit. You should also appoint a new executor or trustee.
- Revise Beneficiary Designations: Update the beneficiaries for your retirement accounts, life insurance policies, and any other accounts that pass by beneficiary designation.
- Change Your Power of Attorney and Health Care Proxy: If your spouse currently holds these positions, you should appoint someone else whom you trust.
- Consider Your Children: If you have minor children, consider who you want to care for them if something happens to you. You may want to establish a trust to manage any inheritance they might receive.
Divorce is a complex process that requires careful planning and consideration. Changing your estate plan during this time is not something you should navigate alone. Krause Estate Planning specializes in estate planning and can guide you through each step of the process, ensuring that your assets are protected and your wishes are respected.
Remember, estate planning is not just about preparing for the future; it's about having peace of mind today. If you have questions about making changes to your estate plan, contact our experienced team at Krause Estate Planning. We proudly serve in areas throughout Wisconsin, including Brookfield, Janesville, Madison, Middleton, Milwaukee, Oregon, Sun Prairie, Verona, and Waunakee.