30 Jul I’m Separated: Should I Update My Estate Plan Now or Wait?
Getting a separation or divorce from a spouse is a major life event, and it has a major impact on your existing estate plan. However, many people tend to push everything but what’s urgent off to the side and circle back when the dust has settled (a divorce decree is entered). But there are several reasons why you shouldn’t wait to change your estate plan now.
Powers of Attorneys – Your Ex Still Has the Power
Separation does not cut your spouse out of your plan (unless a binding Separation Agreement is signed waiving or renouncing those rights to each other). Most people appoint their spouse as their primary agent for Financial and Health Care Powers of Attorney. If your spouse is still named and something happens to you that results in your incapacity, your ex may be in a position to make your end-of-life decisions. If your Financial Power of Attorney is effective immediately, your spouse may also have immediate access to your money with or without your knowledge. Getting new Powers of Attorney in place will revoke your previous documents and name new agents to act on your behalf.
Guardianship – What if Something Happens to You?
Guardianship, in this sense, is referring to minor guardianship, i.e., who is going to raise your children if you can’t? If you have minor children, your ex-spouse will still have constitutional parental rights to be the guardian of your child if you pass away, but if you’re the surviving spouse, your will controls who will ultimately raise your child(ren). Do you want to have the ex-spouse’s family raise your child(ren) or would you prefer to appoint your own family for that role? Creating a new will allows you to name your child(ren)’s guardian.
Last Will & Testament: Trustee of Kids’ Assets – Keep Your Ex’s Hands Off Your Wealth
Without an updated Will in place, your ex-spouse will not be excluded from your estate plan until your divorce or validly executed separation agreement is in place. So, that means your ex is still entitled to your estate and will be your executor. Even after your divorce, if something happens to you, without a will in place, all of your assets will pass to your child(ren). If they are minors, their assets will need to be managed for them by their legal guardian. In this sense, if your ex is their guardian, your ex is holding all of the cards.
Waiting for divorce is not the answer. As soon as you have separated from your spouse you should be making changes to your estate plan, for your protection and the protection of your children.
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