If you’ve gone through a divorce or you are getting ready to file, it’s important to talk to your attorney about the impact it will have on your current estate plan.
It may surprise you to know that, in some states, even if you get a divorce, your ex may still inherit your money and control your affairs if you don’t amend your documents.
Obviously you wouldn’t want your ex-spouse to make your medical decisions or be the beneficiary of your accounts. However, a failure to amend your documents could result in that very outcome.
If you have children, it is especially important to amend your documents to avoid your money going to a future step-parent.
Remember, if your ex becomes the beneficiary of any portion of your estate, your money could then pass to the new spouse–and not your children!—as you would have intended. This could happen if your ex-spouse failed to do any estate planning.
Examples like this are clear reasons why you must talk to your lawyer about updating your estate planning documents, even as the ink is drying on your divorce decree. Here are 4 key documents to consider:
Your last Will and Testament
- You probably don’t want your ex-spouse to be in charge of your affairs if you die.In the state of Texas, an ex-spouse is automatically written out of your will. But this doesn’t mean that there is no need to make any changes to your document. It is best to ensure there is no confusion and have your will redrafted to name a new executor and rethink who your beneficiaries should be. If you have any trusts set up, you’ll want to amend them too.
Power of Attorney
- A power of attorney gives someone significant authority to manage your affairs and make decisions if you are unable to speak for yourself.Many people would shudder at the thought of their ex having control over their bills, living expenses and bank accounts. The power of attorney gives the named party significant financial power. In some states you need to ensure you take steps to revoke the POA and it’s wise to revoke that as soon as possible. In Texas, under probate code section 485a, there is an automatic revocation of an ex-spouses authority under a POA. However, even with this “automatic” revocation, you still should take steps to revoke the POA and execute a new document naming someone else. If someone doesn’t know about the divorce and relies on the document in good faith, you can still be bound by the action. The reality is that it can be difficult to revoke a POA because you don’t know who the person has provided the document to but you need to make an effort to do so.
These name the party who you have designated to make medical decisions on your behalf should you become unable to do so yourself. To avoid your ex spouse making life-or-death decisions for you, it’s wise to update your living will, HIPAA authorizations and medical power of attorney.
Gary Coleman: A Cautionary Tale
You may remember Gary Coleman as a child star from the show Different Strokes
On May 28, 2010 Gary Coleman died after his ex-wife made the decision to pull the plug. He suffered a head trauma and was in a coma. His ex-wife still had the authority to make his medical decisions for him despite their divorce 2 years prior. He had failed to change his medical directive.
We will never know if his ex-wife was the person he wanted to make that decision for him.
Do you want your ex- making this kind of decision?
- Beneficiary Designations – A beneficiary is the person who receives all or some of the money from your insurance policies, bank accounts or investment accounts after your death. It’s easy to forget about these things, but if you don’t update them after the divorce, your money will legally belong to your former spouse.
As you can see, it’s very important to get your ducks in a row after a divorce. To ensure that your legal documents are properly amended, meet with your local estate planning lawyer as soon as possible.
We’re happy to help you get started with the process, so please feel free to call 817.462.5454 for more help. You can also visit us on the web at www.abonelaw.com for more estate planning resources and tips.