If you’re anxious to update your estate plan as you divorce your spouse, don’t get ahead of yourself. There are documents you can change at any time (and probably should). Others shouldn’t be updated until the divorce is final. Still, other elements of your estate plan may need to remain as-is if you don’t want to violate any divorce agreements.
One Certified Divorce Financial Analyst described this time as a “weird purgatory…[that] needs to be navigated very carefully.”
Powers of attorney
If you gave your spouse power of attorney (POA) over your health care and finances in case you became incapacitated, you likely don’t want them to have that responsibility any longer. You can change your POA designations at any time. A spouse doesn’t need to have a POA. It can (and should) be anyone you trust to act in your best interests. You don’t need to wait for the divorce to be final to make these changes.
Your will or revocable living trust
You may no longer want your spouse to inherit anything. However, under Tennessee law, you can’t completely disinherit a spouse. Under Tennessee law, a spouse has a right to claim an “elective share” of a deceased spouse’s estate. Therefore, even if you remove them from your will or living trust, they can go to court and claim that share. You can start drafting revised documents, but it may be best to wait until your divorce is final to put them in place.
If you make any changes to these, which are often used on retirement and investment accounts, you need to make them on the accounts themselves with the institution that holds them. The beneficiaries listed on the account override what’s in your estate plan if the names are different. Again, if this involves removing your spouse’s name, you may need to wait until after the divorce
Life insurance policies have beneficiary designations as well. If you’re ordered to pay spousal and/or child support, you may be required to get a policy (if you don’t have one) to cover those you’re supporting if you pass away.
It’s never too early to start thinking about the revisions you’ll need to make to your estate plan as a result of your divorce. However, it’s crucial to do so on the right timeline. Having experienced legal guidance can help you avoid problems.