Estate Planning After Your Divorce
Revisit Your Estate & Retirement Plan
With all the changes that come with divorce, it is easy to overlook the need to update your estate plan.
Default provisions under the law
Fortunately, Texas law provides that, if a couple divorces, a former spouse will be considered deceased if named as a beneficiary, agent, or fiduciary (such as an executor or trustee) in estate planning documents.
Unfortunately, this treatment does not extend to qualified retirement plans. As a result, a former spouse can be a beneficiary and receive retirement benefits on the death of the employee, unless new forms are signed designating a different beneficiary.
But apart from removing a former spouse as beneficiary and fiduciary on your estate planning documents, divorce may bring about a new and different way of looking at who should be your beneficiaries and how your family should be protected.
For example, you may not want your ex-spouse to be the financial manager of an inheritance going to a minor child you had together. You may also want to review whether it is appropriate for your ex-spouse’s family to be involved in your estate plan as beneficiaries, executors, trustees or agents.
While it is important to periodically review your estate plan to make sure that it still reflects your wishes, it is especially important to do so after a divorce.
What if You Marry Again?
Many people re-marry after a divorce. If you’re considering getting married again, you may want to learn more about pre-nuptial and post-nuptial agreements. Learn the difference between community property and separate property and how you can protect separate property by agreement, even in a community property state like Texas.