Estate planning changes to accompany divorce

When people in Texas decide to divorce, they are often aware of the range of financial, practical and emotional changes and decisions that lie ahead. While divorcing spouses are often prepared for these challenges, there are some issues that can be very important yet are rarely considered at the time of a divorce filing. One such issue is estate planning; during a marriage, many people develop an estate plan jointly with their spouses. After the marriage has come to an end, it is time to change those plans.

There are a number of changes that cannot be made until the divorce is final. For example, spouses cannot change the beneficiaries of their life insurance, retirement, investment, pension or other accounts until after the divorce is completed. However, there are other steps that can be taken right after the filing is made. In addition, once the divorce is final, those previously untouchable accounts can be the first to receive attention. When people fail to change these beneficiaries after divorce, the situation can lead to later lawsuits and family disputes after polices have been disbursed.

Some of the first aspects of an estate plan that a divorcing spouse can change are their healthcare proxies and power of attorney documents. These documents give a person the ability to make medical and financial decisions on behalf of another person in case of their incapacity or death. While most people want their spouses to be the decision-makers in these circumstances, few people want their ex-spouses to be in that same position.

Other documents, like wills and trusts, can be changed during the pending divorce and then again after the end of the marriage is finalized. A lawyer may work with a divorcing spouse to develop an estate plan that addresses their new, post-divorce reality and reflects their current goals and relationships.

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